Breaking It Down: Qantas Frequent Flyer Program Overhaul

Qantas today announced what they touted as the “biggest overhaul to the airline’s loyalty program in its 32 year history.” In a world where many big airlines are moving to dynamic award pricing, many speculated that the Qantas frequent flyer program would change to something similar.

Fortunately, Qantas is keeping the traditional award chart alive. In fact, this “biggest overhaul” turns out to be more positive than negative, and I am definitely letting out a sigh of relief.

Qantas award seats are highly coveted by many of us based in the US for trips to Australasia. Of course, seats in their premium cabins are hard to come by. Still, Qantas is a major oneworld alliance member, which means you can theoretically redeem award flights through any oneworld partner, including American Airlines and Asia Miles.

Additionally, they are transfer partners with American Express Membership Rewards, Citi ThankYou, and Capital One. For this reason, we thought it would be worthwhile to breakdown the key elements from the overhaul.

Not Changing: Qualifying Criteria, Benefits, and Earning Rates

For an overhaul, Qantas is surprisingly keeping a lot of the frequent flyer program the same. Elite qualifying criteria, including the number of status credits required, will stay the same for all elite tiers. The benefits that come with each tier are also staying the same, as will the earning rates on all Qantas flights and partner airlines.

However, Qantas will be introducing a new Lifetime Platinum milestone, starting in September 2019. This can be earned by accruing 75,000 status credits, and will be a new tier in addition to existing Lifetime Gold and Silver tiers. That is a lot of status credit. For reference, qualifying for Platinum (not Lifetime) requires just 1,400 status credits each year. This means Lifetime Platinum woulds basically require you to qualify for Platinum 53+ years, if you are meeting just the minimum requirement.

Positive Changes: More Award Seats, New Partners, Lower(-ish) Surcharges

More Award Seats

Qantas A380 First Class.

One of the positive changes that came with this announcement is Qantas’ commitment to release more award seats. In fact, the airline says that they are releasing one million more seats annually.

To put things in perspective, Qantas says they currently have about five million award seats available annually. For premium cabins, this translates into up to 30% more award seats on “highest demand reward seats.”

There are two caveats here.

1. Qantas didn’t say whether the increased award availability will be available to partner redemptions.

I think this is a really important point that somehow went conveniently unexplained. Many of us like to use Alaska Airlines miles or American Airlines miles to redeem for Qantas award seats.

If these additional award seats are restricted to Qantas’ own program, I think that could be a devaluation for everyone else, but perhaps a plus for those using Qantas’ own points. Of course, keep in mind that those redeeming Qantas miles already have a head start as it stands, since American and Alaska Airlines do not allow booking until 330 days before departure, while Qantas opens its schedule 353 days before departure.

2. It seems that some of the increase in award seats will come from new airline partners. These include China Airlines, Air New Zealand, Bangkok Airways, Air France, and KLM.

Lower-ish Surcharges

Additionally, Qantas is also reducing the amount of surcharges tagged onto award flights. The lower surcharges are only applicable on Qantas and JetStar flights, not partner airlines. This will be an up to 50% reduction, and Qantas gave a few examples of how this change would play out.

For Economy awards, I suppose this can indeed mean significant savings. However, premium cabins will still come with pretty high surcharges. For example, a First Class ticket from Melbourne (MEL) to Los Angeles (LAX) will come with AUD703 (~$485) in fees, which is frankly still ridiculous. I think they should have taken a Singapore Airlines approach, where they increase the prices of awards but cut fuel surcharges completely.

Cheaper Redemptions in Economy

Economy awards on flights that are longer than 2,400 miles one-way will see a drop in price. The itineraries that will see the greatest discount are ones from 3,601 to 5,800 miles one-way, which are now 10% cheaper. The new pricing for Economy awards is effective immediately.

Qantas Award Chart for Economy Class (Effective 6/20/2019)

Negative Changes: Premium Economy, Business, First Class Awards Get More Expensive

Meanwhile, award seats in all premium cabins will get more expensive. Based on the new, sort of weird prices, I think Qantas made an effort to make sure that the award costs wouldn’t go up by more than ~15%, and that’s basically exactly what we got. Shorter itineraries will see a price increase of up to 15.3%, while ultra-long itineraries will see a price increase of about 13%.

Qantas Premium Economy Award Chart (Effective 9/18/2019)

Qantas says that this is the first time in 15 years that they have increased pricing on premium cabins. I think as demand for premium cabin awards increase, an upward price adjustment seems inevitable. I am glad to see that it’s a rather subtle increase.

Qantas Business Class Award Chart (Effective 9/18/2019)

Qantas First Class Award Chart (Effective 9/18/2019)

These award charts will go live on September 18, 2019. This amounts to about three months notice, which I think is worth praising Qantas for.

Qantas Points Club: Status for Those Earning Points through Non-Flying Activities

Qantas acknowledges that two-thirds of all points earned are generated by non-flying activities. This includes credit card spending, shopping, etc. Clearly having a frequent flyer program is a money maker for the airline.

To that end, Qantas will be introducing Qantas Points Club, which will consist of two elite tiers for those who earn points from non-flying activities. The entry level tier will require 150,000 points earned on the ground, while the top tier will require a higher, yet-to-be-disclosed amount of points.

Perks of Qantas Points Club will include travel benefits, such as lounge access and bonus status credits. However, details on how these benefits will be dished out are not yet available. Qantas Points Club will launch in late 2019.

My Take On Points Club

I personally think this is a really innovative idea. In a way, it expands upon the structure by which co-branded credit card holders can earn elite qualifying dollars or miles. Instead of giving them the EQDs/EQMs, Qantas is creating separate elite statuses for them, which I think is genius.

This is because while frequent buyers (ahem) will get a smaller subset of travel benefits, they still don’t have access to a shortcut to true statuses earned from butt-in-seat miles.

There are many people who spend a significant amount of money to earn frequent flyer points, but may only fly the airline once in a while. This is a good way to reward those spending, without diluting the benefits for existing frequent flyers too much. After all, these people clearly aren’t flying enough to earn frequent flyer statuses in the first place. And if they are ultimately incentivized to fly more because of these travel benefits, well that certainly helps Qantas’ bottom line.

The Upshot

Overall, I think these are much smaller changes than I had anticipated. I am Qantas is creating a lot of goodwill in keeping elite qualifying requirements the same, and keeping the core of the program pretty much unchanged. Since most people redeem miles for economy awards, I think many people will be happy to see cheaper awards on that front.

The increase in premium cabin award prices is definitely a negative, though truth be told I generally redeem for seats on Qantas flights using partner airlines’ miles, so this wouldn’t affect too many of us. The increase in award availability I think pretty much offsets this price hike, though part of me worries if partner airlines will continue to have access to all the same award space.

The Points Club is an innovative idea that I am particularly excited about. Obviously, being based in the US, I don’t earn a lot of Qantas points through shopping. Still, if this proves to be successful, perhaps more airlines around the world would adopt similar ideas. After all, many airlines are on the same boat—frequent flyer programs are a big money maker.

What do you make of these changes to the Qantas Frequent Flyer program?