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QANTAS: Frequent Flyer program changes from 1 July leaked

QANTAS: Frequent Flyer program changes from 1 July leaked

The AFR is reporting on leaked documents it has received that purport to show changes to the Qantas Frequent Flyer program, which will be introduced on 1 July 2024. Changes include eliminating Jetstar from the new Classic Plus category and valuing points at 1¢ for economy flights and 1.5¢ for Business Class per frequent flyer point. There is no proposed increase in the number of seats available for the most efficient use of points – Classic Reward seat redemptions.

There have been a range of leaks about the changes to the frequent flyer scheme, suspected to be called ‘Classic+’ or ‘Classic Plus’. This new category means points can be exchanged directly for flights by converting Frequent Flyer points into Australian dollars at a set rate. The rate is reported to be 1¢ per point for economy flights and 1.5¢ for Business Class.

The leaked document sighted by the Australian Financial Review is marked ‘draft’ and ‘for discussion purposes’, so it doesn’t sound like a final version. CEO Vanessa Hudson indicated that the scheme would undergo some changes this year, but this is the first supposed detail of the changes.

a large room with a staircase and plants
The extensive entry to the Qantas First Lounge with its living wall. [Schuetz/2PAXfly]

Biggest Customer Loyalty scheme in the country

The Qantas frequent flyer scheme is the largest scheme in Australia, with over 15 million members in 2023. That’s an increase of nearly a million patrons from the previous year, when the number was 14.2 million. The scheme offers many options for redemptions, but when it comes to airline travel, there are two main ways for points redemptions. The best value redemptions are Classic Rewards, and the worst is Points Plus Pay.

The discussion paper indicates that there will be more Classic Plus reward seats available in premium classes at times members want them. No increase in the number of Classic Rewards is proposed. Seats on Jetstar and partner airlines, including Emirates, although available as Classic Rewards, are not expected to be available on ‘Classic Plus’ rewards.

a restaurant with tables and chairs
The dining section of the Singapore Qantas First Lounge [Schuetz/2PAXfly]

Democratising reward seat access

At the moment, the higher your frequent flyer status, the earlier you get access to Classic Rewards. Under the new Classic Plus scheme, seats would be available 353 days in advance and to all frequent flyer members. Higher status would not get you earlier access. However, higher-status frequent flyers will continue to have early access to Classic Rewards, as they currently do.

Classic Plus rewards would be tied to normal variable airfares, so the cheapest would ‘sell’ out first. The cost of Classic Plus seats will also reflect sale fares. It will be worth Frequent Flyers ‘buying’ early during such discount periods.

The AFR gives the following comparison examples for points required for a Business Class return ticket to London:

  • Classic Rewards = 289,200 points (approx AU$12,000 retail)
  • Classic Plus = 800,000 points
  • Points Plus Pay = 1,200,000

Here is a quick rundown of the differences between each program, Classic Rewards v Classic Plus:

Classic Rewards

  • Available Seats = 5,000,000
  • Fixed-rate redemptions
  • Change cost = 5,000 points
  • Refund cost = 6,000 points
  • Jetstar available
  • Status Credits earned with Points Club

Classic Plus

  • Unlimited Available Seats
  • Dynamic cost for redemptions
  • Change cost =5,000 points
  • Refund cost = 6,000 points
  • Not available on Jetstar
  • Status Credits can be earnt with Points Club
a plane with seats and a monitor
Qantas A330 Business Class cabin interior [Schuetz/2Paxfly]

2PAXfly Takeout

This looks like a worthwhile addition to the frequent flyer redemption options. However, I don’t think it will calm disgruntled frequent flyers. They want more old-fashioned Classic Rewards in premium cabins, preferably at peak times. Being able to redeem points at close to three times the rate of a Classic Reward is not a good deal. It only looks good when compared to a Points Plus Pay points redemption. No one on top of their frequent flyer game is going to see Points Plus Pay or Classic Plus redemptions as a good idea.

The Qantas Frequent Flyer scheme is massively profitable. It has revenue of AU$1.27 billion and earnings of AU$270 million in the six months to 31 December. Qantas wants to see those earning double to a billion dollars over a full year.

Qantas has responded to the AFR article by saying:

We’re finalising improvements to our frequent flyers program 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.

Qantas Spokesperson according to AFR

Problem with that is, what Qantas members are really telling the company is give us more Classic Rewards! Not some inflated scheme called Classic Plus!

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