What we know so far about Qantas’ frequent flyer overhaul

The Qantas frequent flyer program – of which more than 15 million of us are members – is poised for its biggest overhaul since 2019.

It was all very secret squirrel until leaked details of the new program surfaced in The Australian Financial Review last week.

This change may mean your bonus points and conversion rates on things like supermarket rewards go down.Credit: Wolter Peters

Here’s what we now (think we) know:

• It is quite literally a new program, called Classic Plus, that will sit – value-wise – between the lowest-points-for-longest-flights Classic Rewards program and the highest-outlay Points Plus Pay. These original programs will remain.
• It will convert one point into 1¢ for economy flights and one point to 1.5¢ for business flights.
• It will have dynamic pricing. If seats are on sale, they will cost fewer points (potentially even fewer than Classic Rewards seats, which don’t fluctuate – but more in a moment).
• Classic Plus will only be available for Qantas flights – not Jetstar, Emirates or any partner airlines.
• It was also reported that flights will be refundable for a 6000-point fee. However, that is already the case with Classic Rewards.

The above has set some points enthusiasts panicking but I don’t think there’s any need to yet. Firstly, all that has been confirmed by Qantas is that the new scheme will begin on July 1.

CEO Vanessa Hudson also said at the February half-year results: “[Our loyalty program] is a significant, important part of our customers’ satisfaction … we are finalising new parts of our program that deal with what we know are our customers’ pain points.”

This change may mean your bonus points and conversion rates on things like supermarket rewards go down.

That “pain-points” part alludes to Classic Rewards seats, which cost a set number of points, being hard to secure. Points Plus Pay – where you lower the cash price of flights by also using points – are easier to get but values each point at just 0.7¢.

So here comes my speculation on Qantas’ strategy – because it has also conceded the new program will be an “investment” – and what it will mean for your reward flying.

If the advance intel is true, ongoing access to 1200 destinations worldwide remains via the Classic Rewards and Points Plus Pay frequent flyer programs.

But with Classic Plus, the airline is trying to create a virtuous frequent flying circle of members earning, and then straight away churning, points back onto only Qantas.

So, besides loyalty, how does it stand to benefit?

Higher engagement means Qantas could recoup costs by charging corporations more for the points they give out – for example, Woolworths with its Everyday Rewards program, credit card companies and even utilities.

You might, therefore, expect your bonus points and conversion rates to go down. For instance, 2000 Everyday Rewards points become 1000 Qantas points today. That might, say, drop to 700 points.

On the redemption side, the Classic Plus points-to-seats conversion will be based on the lowest possible fare. Seats will likely be released 353 days in advance, like Classic Rewards (although you can get earlier access if you are higher-than-bronze status, to reward the frequent, frequent flyers).

So you’d sensibly check if all the Classic Rewards seats are gone and the points cost of any that remain, and whether the alternative dollar price make a one-point-for-1¢ Classic Plus (economy) seat better value.

The AFR reported an internal note circulated to Qantas staff says: “We encourage members to look early, but also keep an eye out for the regular sales that we run across our domestic and international networks.”

Qantas told me it was “still working to finalise” the changes, “which are responding to what members are telling us about the importance of redeeming points for flights at the times they most want to fly”.

But to get from point A to point B, Classic Rewards looks likely to remain the best points value.

So how do I overcome the common complaint that with only 5 million of them, it’s hard to get seats? With three steps:

1. Unless you are a membership level above the basic bronze, set your calendar reminder to book 353 days in advance.
2. Get ready to pay the – reasonable – taxes. (And remember, if you want to also trigger complimentary credit card travel insurance, you will need to use that card for them… and/or for a defined amount of the travel cost, per person.)
3. Be sure of what you want, so you don’t incur that cancellation penalty of 6000 points a ticket.

Otherwise, it seems you will soon have to be content with paying more points (mostly) for far fewer destinations. But more easily.

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me. Follow Nicole on Facebook, Twitter or Instagram.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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