Qantas ready to reveal massive frequent flyer program change

The much anticipated change to the Qantas frequent flyer program will be unveiled on Monday, providing members with more opportunity to redeem points how they want.

Qantas will unveil details of a much anticipated change to its frequent flyer program on Monday, in a move designed to appease members struggling to redeem points in the way they most want.

High status frequent flyers are among those invited to the announcement at the Qantas head office in Mascot, where CEO Vanessa Hudson will join new Loyalty boss Andrew Glance to deliver the update.

The development of a new flight rewards product to sit alongside “classic rewards” followed widespread frustration with the 15 million member loyalty scheme, aired during parliamentary hearings last year.

Scores of submissions from frequent flyers expressed anger and disappointment at having worked to accumulate thousands of points, only to find they were almost impossible to use.

In February, then Loyalty CEO Olivia Wirth acknowledged members’ “biggest bugbear” was the difficulty in getting premium cabin seats on popular routes internationally.

“That’s a problem we’ve really been looking at over the past 12 months of how do we solve this, how do we ensure we keep our member engagement high?” Ms Wirth told an investor briefing, shortly before she left Qantas.

“This is what we’ve been trying to solve, and today we can indicate there will be an announcement a few weeks down the track which will help solve this pain point and introduce a new flight rewards product.”

New Qantas Loyalty boss Andrew Glance will join CEO Vanessa Hudson on Monday to unveil a much anticipated frequent flyer program update. Picture: Supplied

Since then, Qantas has confirmed the new product, expected to be known as “classic plus” would be in addition to the existing classic rewards scheme and points plus pay.

The positioning meant frequent flyers would pay fewer points for “classic plus” seats than points plus pay, but more than for classic rewards.

Furthermore the cost of a “classic plus” seat would be dependent on the fare, with economy class travellers paying about one point for a cent, and business class a point for every 1.5 cents.

That would mean a $1500 fare for an economy flight from Sydney to Los Angeles might be available for the equivalent of 150,000 frequent flyer points, and a $7000 business class ticket, for 466,666 points.

In comparison, a classic rewards seat purchased on the same flight would cost 66,200 points in economy (plus $206 in taxes and charges) or 214,285 in points plus pay terms.

As well as keeping frequent flyers happy with the potential for flight redemptions greatly improved, the new product appeared designed to drive engagement in the successful loyalty program by making points more valuable.

Engagement was key to maintaining the program’s profitability, with the Loyalty division making $500m in earnings in the 2023 calendar year.

Frequent flyer experts told The Australian last week that frustration at not being able to use points in the way they wanted created the risk of members starting to view points as worthless.

Adele Eliseo from The Champagne Mile said there were almost endless opportunities to earn Qantas points with retailers, banks, finance companies, service stations and hotels all partnering with the airline.

But when it came to redemption for flights, and particularly international flights in premium cabins, it was “arguably tougher to get the same bang for your buck with Qantas points as you once could”.

“Over the past five years, the Qantas Frequent Flyer has experienced substantial growth in membership, with points earning opportunities expanding,” said Ms Eliseo.

“As a result, many Australians have accumulated substantial frequent flyer balances, yet they are struggling to find ways to effectively redeem them for high-value.”

Originally published as Qantas ready to reveal massive frequent flyer program change