Qantas slashes Classic Plus rewards value without telling members

Scoring a Classic Rewards redemption was tough enough but landing a business class seat on a Qantas international flight has just got 20 per cent harder.

Landing a business class seat on a Qantas international flight has just got 20 per cent harder with more points needed for Classic Plus redemptions.

Qantas has quietly raised the bar for its Classic Plus rewards, with 20 per cent more points needed to redeem premium seats on international flights.

The increase comes after a broader points devaluation, and reduces the value of each point from 1.5c to 1.25c when used for redemption on international flights in premium economy, business or first class.

It also comes less than 18 months after Qantas introduced the Classic Plus program in an effort to appease frequent flyers who were struggling to find seats on the flights they most wanted, despite big points balances.

Australian Frequent Flyer editor Matt Graham blew the whistle on the move, revealing the change had been made without notifying members.

Last month Qantas increased the number of points required for Classic reward seats, along with carrier charges on some routes.

However, the change was flagged seven months in advance, giving frequent flyers opportunity to try to redeem points before the devaluation occurred.

“Qantas gave plenty of notice of the other changes, but they didn’t announce the Classic Plus change at all – not before, or even after they made this change,” Mr Graham said.

“I find this disappointing, but I guess Qantas technically doesn’t have to give notice of this because it doesn’t publicly state that Classic Plus redemptions have any particular value.”

Adele Eliseo from The Champagne Mile

Loyalty expert Adele Eliseo of The Champagne Mile said it was likely Qantas was finding the demand for Classic Plus rewards difficult to sustain at the previous redemption rate.

She pointed out that Qantas’ recent full year results showed more than a million Classic Plus seats had been booked in its first year, including 20 per cent by people who had not redeemed a point in five years.

“That indicates Classic Plus has been successful in pulling people away from low-value redemptions such as gift cards, typically worth around half a cent per point, into flights that deliver up to three times the value at between 1c and 1.5c per point,” said Ms Eliseo.

The results also showed 40 per cent of Classic Plus bookings were in premium cabins, more than half were on international flights and a third were during school holidays, she added.

“That points to many members targeting the most expensive seats Qantas could release, often at peak times when demand is highest,” Ms Eliseo said.

“Reducing Classic Plus premium international redemptions from 1.5c to 1.25c per point value signals that Qantas is scaling back a level of value it can’t sustain in the long term.”

A Qantas spokesman said Classic Plus rewards “continued to offer some of the best value across the frequent flyer program”.

Mr Graham said frequent flyer members would also find they needed more points to redeem for other rewards including wine, hotels, holidays and Points Plus Pay bookings.

As with the Classic Plus changes, the increases were not flagged with members, he said.

“The fact that Qantas can and does decrease the value of its points whenever it wants to, is another reason why I always recommend to people to use their points for something they value now, rather than hoarding them,” said Mr Graham.

“Points don’t earn any interest and only become less valuable over time unfortunately.”

American Express Membership Rewards has also changed the rules for airline loyalty enthusiasts.

In a further development for members of airline loyalty programs, American Express membership rewards has flagged changes that will favour Qantas Frequent Flyer and Virgin Australia Velocity.

Unlike credit cards linked to a specific frequent flyer program, American Express allows members to transfer points to multiple airline partners.

Ms Eliseo said from mid-December transfers into certain schemes including Virgin Atlantic Flying Club, Qatar Airways’ Privilege Club and Cathay Asia Miles will cost 50 per cent more points.

At the same time transfer rates for Qantas and Velocity will remain unchanged.

“The changes effectively push more cardholders into Qantas and Virgin redemptions, giving both carriers a greater share of proprietary credit card transfers,” said Ms Eliseo.

“This will result in less choice for consumers and more competition for already scarce reward seats.”