There are winners and loses as Qantas announced the biggest overhaul in the 32-year history of its Frequent Flyer program.
Addressing media in Sydney on Thursday, Qantas chief executive Alan Joyce and divisional head Olivia Wirth unveiled the huge changes to their program, which will impact its 12.7 million members.
The changes will be rolled out over the next 12 months, boosted by a $25 million investment from the Australian airline.
The changes won’t affect how people earn points but will change the way they redeem them on Qantas flights, and followed years of feedback from members, Mr Joyce said.
“Some members find it hard to find the seats they want on the route they want to fly,” he said.
“People are telling us the carrier charges are too high. People are telling us they get a lot of points from on-the-ground spending, but there’s no recognition for them in the air.”
Under the changes, there will be more seats available to redeem and fees will be slashed, but if you’re hoping to upgrade to a premium cabin, it will cost you more in points.
And there is another aspirational club most of us won’t get into to — a new lifetime membership described as possibly being “even more exclusive than the Chairman’s Lounge”.
Here are the changes to your Frequent Flyer membership.
MORE SEATS TO REDEEM WITH POINTS
For members, the biggest change will be access to more seats for passengers, with more than one million extra seats allocated annually to Frequent Flyers on popular routes.
“The additional seats we’re talking about will concentrate on peak periods that our customers want to use the seats, like Easter, Christmas, and school holidays,” Mr Joyce said.
“Importantly, they’ll also be on the most popular routes, like London, Los Angeles, Singapore and Tokyo.
“So this is what our customers have been asking for: more seats, at better times, on the most popular routes.”
There will also be a 30 per cent increase in premium seats available on Qantas international flights. Agreements with partner airlines will make it easier to access seats on flights in places such as New Zealand and South-East Asia, Mr Joyce said.
Before the changes, there were five million seats available to Frequent Flyers each year.
CARRIER CHARGES SLASHED
Qantas will also reduce the carrier charges, or fees you have to pay when redeeming points.
Mr Joyce said carrier charges had been a “pain point” for rewards customers.
Previously, an economy flight from Melbourne to Los Angeles cost $513 in fees. That has dropped to $393.
The reduction in carrier charges is being introduced across all cabin classes.
PREMIUM CABINS WILL COST YOU MORE IN POINTS
This is where some members may feel they’re worse off: points on cabins are increasing.
If you’re happy to travel in economy overseas, the changes to the program means a member will need to hand over less points for a Classic Reward seat.
However, if you’re looking to redeem points in first class, business and premium economy, members will be looking at an increased fee of 15 per cent. An upgrade will also cost you more in the premium cabin — up to 9 per cent.
For example, that Melbourne to LA flight in premium economy used to cost 144,000 points, and now costs 162,600 points.
In business class, it will go from 192,000 to 216,000 points, and in first class, from 288,000 to 325,600 points.
Mr Joyce denied people would be annoyed by the points cost hikes.
“There are more points, but the product has dramatically improved,” he said, adding it was the airline’s first increase in points in 15 years.
“We think it represents the value people are getting out there, it represents the investment we’re making in products, and it represents what people are calling for — more seats.
“These changes allowed us to add 30 per cent more seats on Qantas international because of this rebalance. And the biggest requirement people want is to get the seats at peak periods, and we’re spending $25 million on doing it this way. We’re not making money out of the changes, we’re investing money back into people’s ability to use their points.”
POINTS CLUB PROGRAM LAUNCHED
But perhaps the coolest change will be the new “Points Club” program which will reward members who don’t necessarily earn points in the sky.
The new club will include two tiers with entry gained based on a member passing an annual criteria.
Once in the club, flight and travel benefits for non-flying members will include lounge access and bonus status credit as well as offers and discounts across their “partner” network.
The entry-level Points Club tier will be accessed through earning 150,000 points on the ground while the exclusive ‘Points Club Plus’ tier, with richer member benefits, will have a higher annual threshold. Points Club will be launched in late 2019.
The airline is also introducing Lifetime Platinum status, an exclusive club of members Ms Wirth said would be “in many ways, even more exclusive than the Chairman’s Lounge”.
“The combination of the new Points Club, the introduction of our most elite tier in Lifetime Platinum, and the increase in seats across our network means the revamped program should offer something for everyone,” Ms Wirth added.
Members have often complained there are not enough seats or upgrades available for them to book with points.
Qantas Loyalty, which allows customers to earn redeemable points by booking flights, shopping at retailers including Woolworths and using linked credit cards, made a $372 million profit in the last financial year off revenue of $1.55 billion.
Qantas last month announced its first-ever so-called “points plane” from Melbourne to Tokyo, with seats on the October flight reserved solely for those paying with frequent flyer points.