Qantas passenger’s big question following frequent flyer overhaul
It’s been dubbed as the biggest change to Qantas’ frequent flyer program in 35 years. But one passenger has exposed one big problem.
Last month, I flew first class to New York with Emirates.
As if that sentence doesn’t already drip with enough privilege, I bought the fare at a discount of roughly 90 per cent.
That’s because I redeemed 209,000 Qantas points for the Classic Reward fare, and paid $2500 in taxes and fees. The one-way trip would have cost up to an eye-watering $25,000 if I’d paid the full fare.
The flight was every bit as extraordinary as I hoped it would be, and I’m already hoarding points for my next trip.
But on Monday, Qantas announced a massive shake-up to its frequent flyer points program – and while I was hoping it would take me a small step closer towards my next flight at the pointy end of the plane, that’s now unlikely.
Why? Because the airline isn’t boosting the number of Classic Reward fares it makes available. Instead, it’s launching a whole new, more expensive frequent flyer program.
The good news and what’s not changing
Thankfully, Qantas has listened to feedback from its more than 16 million Australian Qantas Frequent Flyer members, who said we didn’t want them to mess with the existing Classic Rewards system. We love Classic Rewards. We’re low-key obsessed with them.
So we’re counting our blessings that Qantas has confirmed it is keeping its existing Classic Rewards program – which is how I booked my bougie Emirates flight – exactly as it is.
For me, Classic Rewards has a couple of killer benefits.
The deals are great value – they’re the cheapest redemption going. A one-way Qantas flight between Brisbane and Sydney is just 8000 in economy plus about $40 in taxes, or 6400 points on Jetstar and $32 in tax. That same route in business class is 18,600 points plus $40.
And secondly, if you supercharge your points earnings with a credit card bonus offer of 80,000 points, that’s enough to redeem 10 one-way economy flights or four one-way business flights.
Classic Rewards allows you to book codeshares – so you can book flights on partner airlines, like Jetstar and Emirates.
The one big disadvantage of the program, however, is how few of them are on offer.
Currently Qantas offers just 5 million reward seats per year. Considering there are millions more Qantas Frequent Flyer members, it’s not enough to go around.
The airline has copped constant complaints about the availability of redeemable flights over the last few years, especially the highly coveted premium economy, business and first class fares.
As frequent flyers, all we wanted was more Classic Rewards fares. Instead, we got a whole new program.
How does the new Qantas frequent flyer program work?
Touted as “the biggest change to the program in 35 years”, Qantas is launching Classic Plus as a companion to Classic Rewards.
On the plus side, there will be more flights available to redeem using points. But, there’s a big catch.
Qantas chief executive Vanessa Hudson says it will add “four times the amount of access to seats than Classic Rewards”, with 20 million seats up for redemption each year.
What she doesn’t spell out quite so explicitly, is the fact that those fares will cost quite a bit more to redeem than Classic Reward fares. These new Plus fares will mimic regular fares, with peak season flights demanding more points than a low-season fare.
Take a return flight from Sydney to London, for example. Flying at peak season, you need almost twice the amount of points for an economy Classic Plus fare than Classic Rewards, and well over double for business fares.
Basically, that route in economy would come in at 110,400 Classic Reqards points plus $714 in taxes compared with 130,600 points for Classic Plus in low season or 191,800 points in high season.
Classic Plus fares are also not available on codeshare flights. So, even if you have enough points to pay the inflated fare, you’re not able to book with Emirates or even with Jetstar.
The most telling part of their press release, perhaps, is just how profitable this new redemption program is set to be. The changes “are expected to deliver a substantial improvement in member engagement and will help drive the long-term growth of Qantas Loyalty”, Qantas’s statement says. Translation: it’s going to put a lot of money in Qantas’s bank account.
The Classic Plus program will cost them around $120 million to deliver in FY25. But for their investment, they expect Qantas Loyalty to deliver “between $500 – $525 million Underlying EBIT in FY24 before returning to growth of ~10 per cent in Underlying EBIT in FY25.”
The new rewards program was designed to address “ongoing pain points’’ for members, Qantas says. But it looks like the biggest pain point it wants to address is its own drive to boost profits.
Sarah Megginson is the personal finance expert at Finder