Qantas has finally unveiled a long-awaited update to its frequent flyer program. But will it actually make using points easier?
More than half the country are members of Qantas’ frequent flyer program, which has generated billions of dollars for the airline business over the past 35 years.
Some Qantas flights do not have any points-redeemable option.Credit: Getty
While this growth has been great for shareholders, it has also led to more complaints about how difficult it is to redeem points since flying resumed after the COVID-19 pandemic.
There are rarely more than about four rewards seats available in a premium cabin on any given flight with any airline. In Qantas’ case this means more than 15 million members are fighting over a limited number of rewards seats – and there are some flights without any points-redeemable options.
What are the changes?
Until now, there have been two ways to use frequent flyer points for flights. The business releases about 5 million Classic Rewards seats, which can be booked using a set number of points and dollars every year across Qantas, Jetstar and its partners.
If, like most of the country, you miss out on a Classic Rewards seat, you can also buy a seat through Points Plus Pay, which tends to burn through more points and requires more money.
Now, Qantas has added “Classic Plus”, which adds 20 million rewards seats to the network. Classic Plus will allow those travelling with Qantas (but not Jetstar, Emirates or its other partner airlines) to redeem about 1.5¢ per point. This is better value than the 0.6¢ offered by Points Plus Pay, but the number of points needed will fluctuate with the cost of the fare at any given time.
This means that, unlike Classic Rewards seats, a Classic Plus seat will require more points during school holidays and other peak periods such as long weekends or during sporting events.
Why can’t I fly to Europe or the US using points alone?
Because it doesn’t make commercial sense based on their operating targets.
Qantas’ operating margin on international flights (including its freight division) was 11.7 per cent in 2023, buoyed by limited capacity and record demand post-COVID-19, but this is traditionally the most difficult part of the business to make profitable due to its high costs.
The closest thing to a “free” flight with Qantas remains snagging one of 5 million Classic Rewards seats, which means you can fly from, say, Sydney to Los Angeles in business class for $400 and 108,400 points ... if you can manage to beat the millions of other members to it.
Qantas boss Vanessa Hudson is trying to address the brand failings of the business while ensuring investors are not spooked by any drastic changes to its projections. The loyalty division is targeting $1 billion in earnings by 2030, which means it needs to generate about 10 per cent growth every year until then.
Qantas boss Vanessa Hudson says the rewards program will become more flexible. Credit: Louise Kennerley
Hudson said on Monday she believed the extra flexibility in the frequent flyer program would improve earnings. It’s too soon to weigh in on whether she’s right. The Classic Plus decision was aimed at “providing more access to more seats on more flights across more time periods” but that it was important to do so sustainably, she said.
Virgin Australia, Qantas’ major local competitor, also has a frequent flyer program called Velocity, which has two ways to redeem points for flights: Velocity Rewards and Any Seats.
The number of Velocity points required for flights tends to be less than Qantas on comparable legs, and they are redeemable on Virgin’s partner airlines such as Qatar Airways and Singapore Airlines. Being one of Velocity’s 11 million members can get you a free flight to an international destination but no airline rewards program lets you claim points to cover taxes and other booking charges in addition to the fare itself.
Will Qantas add more Classic Rewards seats?
The number of points required for each Classic Rewards seat has not been increased since 2019, and they book out almost instantly.
Qantas said on Monday that there were no changes to the Classic Rewards program coming any time soon. This means that although they’ve ruled out increasing the number of points required, there’s no imminent plan to make more Classic Rewards seats available.
“We are committed to Classic Rewards ... we’re not changing that and if we were to change it, we will give customers lots of notice. It’s not a feature of what the plan is today,” Hudson said.
There were 30 per cent more classic redemption bookings last year than in 2019, the loyalty program’s executive manager Sarah Udy said.
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