Article: Why Qantas Points Are Not a Real Currency

[AFF Editor]

Why Qantas Points Are Not a Real Currency is an article written by AFF editorial staff:

Why Qantas Points Are Not a Real Currency

Qantas Frequent Flyer points have almost become a de-facto currency in Australia. But Qantas points are not like money for several reasons.

www.australianfrequentflyer.com.au

You can leave a comment or discuss this topic below.

 

[SYD]

TBH, does anyone consider QFF (or any loyalty program) points a “currency”? They all have sweet spots redeeming earned points/miles for reward flights or stays but beyond that they have a fairly ordinary cash equivalent (ie the ”free” toaster).

 

[justinbrett]

Not sure why QF is singled out in this article - it's no different to any other loyalty program.

And did anybody ever say it was a currency?

 

[RooFlyer]

Not sure why QF is singled out in this article - it's no different to any other loyalty program.

Probably because its self-styled "the national airline" and one which a good majority of the Australian population collect the points on. Unlike, say BA, American, or even Virgin.

If you are the big guy in town, you are going to get attention to match - good and bad.

And did anybody ever say it was a currency?

All the time. It behaves like a currency because you can use Qantas points to buy flights with, as well as goods, wine, electronics etc etc. Sounds like a currency to me.

Or, as the article says:

Qantas Frequent Flyer points have almost become a de-facto currency in Australia. You can earn Qantas points almost anywhere in this country, and you can redeem them like money in almost as many different places.

.. and goes on to say that in spite of its purchasing ability, it fails other tests of 'currency'.

Big deal. Is that a problem?

 

[MelbFlyer]

I don't consider QFF points a legitimate non-airline currency and nor should anyone else.

They're merely nothing more than an internal currency for Qantas and its partner airlines in which you can redeem award seats on.

I'd never use the points for paying for fuel or similar.

I made 2 mistakes years ago :
1. By using QFF points to pay for a hotel
2. By using QFF points for only a 2 leg trip when I had other flights as well - Melbourne > HK in Economy on CX and then HK > New York in Business on CX (then paying cash fares for internal US flights (AS and UA) rather than using QFF points) - although I only had around 150k points at the time and the CX flights was 129k points at the time).

I have learnt from it since (ie. it's terrible value for anything other than classic rewards or points upgrades).

 

[AFF Editor]

Not sure why QF is singled out in this article - it's no different to any other loyalty program.

And did anybody ever say it was a currency?

This article specifically mentions Qantas because there are actually people in Australia that call Qantas points a de-facto currency, including mainstream media outlets.

Here are just a few examples:
https://qz.com/258878/australia-has-a-de-facto-second-currency-frequent-flier-miles
https://www.nabtrade.com.au/insights/news/2018/03/is_qantas_a_cryptocu
https://www.intelligentinvestor.com...-qantas-a-cryptocurrency-in-the-making/142325
https://www.executivetraveller.com/news/qantas-points-millionaires-can-now-buy-practically-anything

The same isn't really true for Velocity points or Flybuys points, etc.

 

[RooFlyer]

I don't consider QFF points a legitimate non-airline currency and nor should anyone else.

They're merely nothing more than an internal currency for Qantas and its partner airlines in which you can redeem award seats on.

Well, I may consider them a currency, for certain purposes. Don't understand the second sentence. They ARE more than a 'currency' for purchasing Qantas and partner award seats on - you can purchase wine etc etc.

I made 2 mistakes years ago :
1. By using QFF points to pay for a hotel
2. By using QFF points for only a 2 leg trip when I had other flights as well - Melbourne > HK in Economy on CX and then HK > New York in Business on CX (then paying cash fares for internal US flights (AS and UA) rather than using QFF points) - although I only had around 150k points at the time and the CX flights was 129k points at the time).

I don't follow why these were mistakes, but perhaps that's not germane to the thread.

I have learnt from it since (ie. it's terrible value for anything other than classic rewards or points upgrades).

I'd mostly agree with you there, but notwithstanding, you are able to buy other stuff with Qantas points. If you have gazillions of QFF points, and don't wish to (or can't) fly, then goods purchases CAN be OK value

 

[Rono]

I think it's also a case of semantics i.e. 'currency can mean whatever you want it to mean'. What are two pigs worth in the PNG highlands, I don't know but I bet there is a going rate when wanting to either buy them or sell/exchange them. Currency has had many forms over the years in every society.

When travelling in the USSR, I was quite often amazed to see young children being given old imperial roubles, or wartime deutchmarks etc to play with/draw on. As their parents said, sure its money (currency) but its only worth what the system and its citizens say its worth at that time.

As for a frequent flyer points value is, I'm guessing that somewhere on any airlines balance sheets sits a liability indicating what their programs frequent flyer program is estimated to be in $ terms.


Just my thoughts.

Cheers

Rono

 

[justinbrett]

This article specifically mentions Qantas because there are actually people in Australia that call Qantas points a de-facto currency, including mainstream media outlets.

Here are just a few examples:
https://qz.com/258878/australia-has-a-de-facto-second-currency-frequent-flier-miles
https://www.nabtrade.com.au/insights/news/2018/03/is_qantas_a_cryptocu
https://www.intelligentinvestor.com...-qantas-a-cryptocurrency-in-the-making/142325
https://www.executivetraveller.com/news/qantas-points-millionaires-can-now-buy-practically-anything

The same isn't really true for Velocity points or Flybuys points, etc.

I think you're reaching there posting an article from 2014, and noting none of those are what most would consider mainstream media. You can google the same for Velocity or whatever international program and similar articles exist. Loyality programs are very profitable for the airlines, that's the point.

I don't have a problem with your article but you know as well as I that QFF operates no different to most airline loyalty programs (arguably the US programs are even more currency-like) and it's odd to me why you report on this as a QF issue. You could have written the same article and applied to all airline loyalty programs.

Big deal. Is that a problem?

It's not, never said it was. I don't disagree with the article itself, but I think most people understand it's not a literal currency that you invest in - it is like a currency in terms of you can buy (earn) points and sell (redeem) them, I'd love to see someone with a source that suggests it's a literal currency.

It's just a bit click-baity to me that we have to make this an anti-QF story.

I think it's also a case of semantics i.e. 'currency can mean whatever you want it to mean'. What are two pigs worth in the PNG highlands, I don't know but I bet there is a going rate when wanting to either buy them or sell/exchange them. Currency has had many forms over the years in every society.

Yes, and rum used to be a currency here in colonial days.

 

[jpp42]

One thing that makes it not a currency is the lack of legal protections. My understanding is that if you violate the terms of service of a QFF account and it's closed by Qantas, you lose all your points. This would not be acceptable if it was a real bank account. Keeping away from banking regulations is one reason Qantas does its best never to publicly assign a specific value to points, although they're skirting the line here by selling top-up points, IMO.

 

[RooFlyer]

It's not, never said it was. I don't disagree with the article itself, but I think most people understand it's not a literal currency that you invest in - it is like a currency in terms of you can buy (earn) points and sell (redeem) them, I'd love to see someone with a source that suggests it's a literal currency.

It's just a bit click-baity to me that we have to make this an anti-QF story.

Methinks you protest too much and are again a wee bit sensitive about an article about Qantas. The article never suggested it was a "literal currency you invest in" - in fact it says exactly the opposite . The headline says its "not a real currency."

I don't even know what click-bait means in this context. A writer for a newspaper or journal or on-line wants to write on topics of interest. An article using Qantas as its example is of more interest AND more relevant to most readers here than a generic article.

I think you're reaching there posting an article from 2014, and noting none of those are what most would consider mainstream media.

You asked "And did anybody ever say it was a currency?" (my bold) and you were given several examples as an answer. I don't know why you don't like the answer, as obviously, they ever did.

I don't have a problem with your article but you know as well as I that QFF operates no different to most airline loyalty programs (arguably the US programs are even more currency-like) and it's odd to me why you report on this as a QF issue.

Again, consider that the article is Qantas focussed because we are in Australia, and Qantas has BY FAR the largest loyalty program and is probably the subject of most posts on AFF. Sounds like a good reason for the Australian Frequent Flyer Gazette to write about the Qantas program.

I'm sure Qantas would be flattered to be the centre of attention, yet again. . If you want Qantas regarded as just another airline in discussion, then maybe Flyertalk is for you.

One thing that makes it not a currency is the lack of legal protections. My understanding is that if you violate the terms of service of a QFF account and it's closed by Qantas, you lose all your points. This would not be acceptable if it was a real bank account

Again, the article makes just that point.

 

[justinbrett]

Methinks you protest too much and are again a wee bit sensitive about an article about Qantas. The article never suggested it was a "literal currency you invest in" - in fact it says exactly the opposite . The headline says its "not a real currency."

I don't even know what click-bait means in this context. A writer for a newspaper or journal or on-line wants to write on topics of interest. An article using Qantas as its example is of more interest AND more relevant to most readers here than a generic article.

But that's my point. Nobody claimed it was a literal currency. Not even the sources quoted. I've never seen anyone on here telling people to invest in QFF points. It's an article answering a question nobody asked.

The article doesn't use Qantas as an example. The whole article is framed to be solely about Qantas, apart from a brief mention of other airlines at the end.

Again, consider that the article is Qantas focussed because we are in Australia, and Qantas has BY FAR the largest loyalty program and is probably the subject of most posts on AFF. Sounds like a good reason for the Australian Frequent Flyer Gazette to write about the Qantas program.

QFF may be the largest, but not "by far". Velocity has 11 million, Flybuys has 8.6 million. Qantas has 13.5 million but I'd take a guess they have more members outside Australia than the other two.

I actually think it was a missed opportunity not talking about Velocity, as unlike QF there are ways to exchange points to other airline programs, something you can't do with QF.

And here's a much more recent article talking about the velocity "currency"

Is Velocity now Australia’s most flexible frequent flyer currency?

Virgin Australia loyalists are seeing more rewards open up across more airlines.

www.executivetraveller.com

 

[andye]

One of the best things about not being a currency is that the points themselves are not subject to tax

 

[helenma]

It might not be a 'currency' but points sure hold value, and I'd bet there has been a divorce or two when Qantas Points have been raised and fought over

 

[jakeseven7]

And did anybody ever say it was a currency?

Mmm hmmm agree. Click bait works right

 

[CaptainCurtis]

Interesting article from an economics perspective. I think another interesting question would be - are Qantas points an asset?

 

[Mr H]

I have certainly heard claims that Qantas points were a de facto second currency - probably written tongue in cheek to convey a sense of how widespread they are.

In my eyes, the main reason they are not currency is that they are not transferrable.

 

[oz_mark]

Not sure why QF is singled out in this article - it's no different to any other loyalty program.

And did anybody ever say it was a currency?

Mostly in the realm of Bloggers and even the AFF Editor have all referred to points as currency

Blog (example, The Points Guy): Why all travelers should earn transferable credit card points - The Points Guy
Blog (example, Point Hacks): What's a point worth? Here are our latest valuations

AFF: Want to Fly to Europe? Collect a Flexible Points Currency!

I'm sure I've seen references in the Mainstream media as well.

 

[Rono]

I'm surprised that none of the accountants here have picked up on my earlier comment here.....

''As for a frequent flyer points value is, I'm guessing that somewhere on any airlines balance sheets sits a liability indicating what their programs frequent flyer program is estimated to be in $ terms.''

Surely some eagle eye has an observation or two based on airlines annual reports and balance sheets.

regards

Rono

 

[RooFlyer]

And here's a much more recent article talking about the velocity "currency"

Is Velocity now Australia’s most flexible frequent flyer currency?

Virgin Australia loyalists are seeing more rewards open up across more airlines.

www.executivetraveller.com

Gosh, a recent article referring to FF points as a 'currency'. I guess you just answered your own question? Did anyone at that time moan that Virgin Velocity was being singled out or that the article was click-bait?

QFF may be the largest, but not "by far". Velocity has 11 million, Flybuys has 8.6 million. Qantas has 13.5 million but I'd take a guess they have more members outside Australia than the other two.

Well, a 22% margin looks pretty by far to me, but YMMV.