Qantas has announced what critics say is a “long overdue” overhaul of its wildly popular Frequent Flyer loyalty program.
Billed as the biggest revamp in the scheme’s 32-year history, the $25 million overhaul will free up an extra one million seats to high-demand destinations for so-called reward flights, which customers pay for with points they have earned by using Qantas services and those of its partners.
The investment will go on making those seats available and reducing charges, although the airline anticipates that the increase in business it will generate will offset that within the first year.
Centre for Aviation executive chairman Peter Harbison said the changes were “long overdue”.
“Qantas has had the meanest redemptions policy of any airline I know,” Mr Harbison said.
Mr Harbison criticised Qantas for the lack of seats made available under the previous scheme, and the high fees it charged to use accrued points.
Point Hacks spokesman and frequent flyer expert Daniel Sciberras said that overall the changes were “quite positive for most members”.
“Every member of the program is different in terms of how they earn and redeem points, but you’ll benefit one way or another,” he said.
“The only negative side is that some of the points requirements for some premium classes are going up.”
The changes will see one million extra seats made available for rewards exemptions annually.
“That’s equivalent to 20 Sydney Cricket Grounds or 2000 A380s, so that addresses the biggest concern of most frequent flyer members – that they can earn their points easily but find it hard to redeem them,” Mr Sciberras said.
Prior to the changes, some members would find themselves forced to stockpile points and “redeem them for rewards they didn’t really want just so they [could] get something”, he said.
High taxes, fees, and charges are another major concern that has been addressed by the changes, with such costs to be reduced by as much as 50 per cent on some bookings.
“It will make [Qantas] a lot more competitive,” Mr Sciberras said.
Members who earn more points on the ground than in the air will also benefit.
“The other great initiative that no one was expecting was the introduction of a points club to reward members considered to be more frequent buyers than flyers…there’s not much detail out yet, but the [two-tiered system] is expected to launch later this year,” Mr Sciberras said.
In addition to retaining existing partnerships with overseas airlines, Qantas has also added five new partnerships with airlines including Air New Zealand, KLM, and Bangkok Airways.
While Qantas is one of the few airlines that charges a fee to join its frequent flyers, savvy consumers can take advantage of offers that allow them to avoid it, Mr Sciberras said.
“There are plenty of opportunities to have the joining fee waived, such as by signing up to a Qantas credit card, or joining Woolworths Rewards, which is one of the easiest ways,” he said.
It’s not all good news, though, with upgrades and business class seats set to require more points – but chief executive Alan Joyce said the changes will generally improve how Qantas Frequent Flyer’s near 13 million members are recognised and rewarded.
“These changes are about making it easier for members,” Mr Joyce said.
“We know the majority of our members want to use their points to take a dream trip overseas, so we are adding more reward seats including first, business and premium economy to places like London, Los Angeles, Tokyo and Singapore.”
Qantas Loyalty, which allows customers to earn redeemable points by booking flights, shopping at retailers including Woolworths, and using linked credit cards, was founded in 1987 and has grown from 50,000 members.
It made a $372 million profit in the past financial year off revenue of $1.55 billion.
Qantas last month announced its first so-called “points plane” from Melbourne to Tokyo, with all seats on the October flight reserved solely for those paying with frequent flyer points.
Qantas Loyalty boss Olivia Wirth said the airline had conducted extensive research before making the changes announced on Thursday.
“There’s a lot about the Qantas Frequent Flyer program that our members tell us they love, but there are also areas of the program that have increasingly come under pressure as a result of rapid expansion,” she said.
“What we’re announcing today is all about investing more into the heart of our program.”