Frequent flyer points: what you should do about them now
As the airline industry reels, millions of Australians holding Qantas and Velocity frequent flyer points are wondering what to do about them. Here’s what the experts suggest.
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Frequent flyer points have lost lustre amid grounded flights and airline collapses, but there is still value and opportunity for savvy program members.
Virgin Australia’s plunge into voluntary administration last month has seen its Velocity frequent flyer program put on hold, while Qantas points can still be earned and spent – even though almost no planes are flying.
Frequent flyer points specialists say patient customers should still benefit, and warn against cashing out points for gift cards, appliances and other items if they plan to fly in the future.
The founder and CEO of iFLYflat, Steve Hui, said he believed Virgin and Velocity would be up and running again domestically within six months.
Mr Hui said members might receive “a slight haircut in terms of value of points but they won’t want to do that right away”.
“They don’t want people to think these programs are useless now,” he said.
Mr Hui said Qantas members could use points to book flights in April 2021.
“Just because nobody is flying right now doesn’t mean no one can fly in December,” he said.
“You get better bang for your buck to fly.”
A reward point used to buy a gift voucher or other online store item was worth half a cent, Mr Hui said, but for an economy flight it was 1.1c and for business class 3.5c.
“But if you have lost your job, cashing your points out for a gift voucher is better than nothing,” he said.
Thechampagnemile.com.au founder Adele Eliseo said Velocity members had no option but to sit tight after the program suspended redemptions.
“The Velocity program boasts over 10 million members and is highly profitable in its own right, so it’s very unlikely that the program will disappear,” she said.
Ms Eliseo said there would likely be a restructuring of the program, which had eroded customer loyalty and trust.
“However, with Virgin Australia experiencing a severe cash crunch, it simply wasn’t sustainable for Velocity to continue to allow a run on points,” she said.
Ms Eliseo suggested Qantas members hang onto their points and “avoid the temptation to cash them out for low value at the Qantas Store”.
“While overseas travel may be off the cards for now, domestic and possibly even trans-Tasman travel may open up in the short- to medium-term,” she said.
A Qantas spokeswoman said two-thirds of Qantas points were earned through credit cards and other partnerships, and many members stockpiled their points to take big trips.
“We haven’t seen travel restrictions change that behaviour,” she said.
“In fact, more than 80 per cent of members still want to use their points on a holiday – they’re just delaying it.
“As we come out of the isolation period, we’ll be looking at ways to increase the number of redemption seats across Qantas and our partners to help people use the points they’ve been saving up, and meet the significant pent-up travel demand.”
Originally published as Frequent flyer points: what you should do about them now