Article: Should Qantas Sell Status Credits?

[AFF Editor]

Should Qantas Sell Status Credits? is an article written by the AFF editorial team:

Should Qantas Sell Status Credits?

By selling status credits, Qantas could reduce unnecessary status runs and make extra revenue. But is it a good idea?

www.australianfrequentflyer.com.au

You can leave a comment or discuss this topic below.

 

[SeatBackForward]

No.

That you can earn SCs by having enough points (via Points club classic reward redemptions) devalues the concept of SCs enough already.

SCs should only be earned from flying for it to truly be a frequent flyer program, rather than some generic consumer loyalty program.

 

[opusman]

Conversely, what use are SCs if you don't fly? Status does nothing unless you actually travel to use it.

 

[oz_boater]

The point of status credits is to encourage people to fly - esp with QANTAS or on QANTAS code shares.

While that remains the point, how would it make sense for QANTAS to sell them ? (Other than in limited circumstances such as topping up if you are just about to miss).

QANTAS also needs to keep higher status relatively rare, otherwise it gets devalued via crowding.

What would make more sense is to address the issue more SCs making no diff (say have made gold, but won't make platinum in a year). Maybe in those circumstances roll the excess over? Maybe at a reduced rate?

 

[RichardMEL]

Given the US programs "sell" elite status, or at least a prime component of it via their credit card partners - eg: earning AA Loyalty Points, UA PQP, DL MQD etc via CC spend - at least up to certain limits - is the way these frequent buyer programs are going. I don't personally think it's right, but I am old school who put the "Flyer" into Frequent Flyer I guess. I actually think QF's "solution" to this, being Points Club isn't a bad way to go to reward the high spenders engaged in the ecosystem.

I also recall QF dabbling with the SC earn on the ground - eg the ANZ Black cards with 75 SC's and the like, green tier etc. Those are modest amounts so don't really impact on the higher status levels though.

I agree that I don't think QF would do this, but if they did, I should hope that there were limits (as the other program examples in the article have too) so that you basically couldn't buy right to Platinum, or daresay P1 (also recall the idea mooted last year about $1m spend or 1m points earn getting P1 - which thankfully seems to have gone nowhere - whichever that option was discussed in QF focus groups).

As noted above, having status is only really helpful for those flying (except in programs which provide extra on ground perks, like linked status in hotel brands), so if one did buy up to say Platinum, but only actually flew infrequently, then the effect is probably marginal. I would also suspect that those who would be inclined to buy large amounts of SC would either be typically motivated to buy up to retain (eg: Gold) which makes sense if one might fall a bit short, or those looking to earn high status for a spend without putting one's BIS. A product like the HSBC Star Alliance card is aimed at these folks I suppose (though the status comp is only for the first year iirc). I guess if those kinds of folks have the coin to buy in like that, they're going to spend more on travel anyway.

I'd prefer an option to buy up to retain status, or perhaps make the next level if close - but to a certain limit (eg: 50 SC short of Silver? ok. 100 from Gold or 200 from Plat say then have a buy in, but not 500 from Gold). With the UA example linked in the article, for example, the buy up prices for 2024 weren't exactly attractive to most for the levels, so you'd have to really want it (and have the coin) but it could be an option (or just formalising more the seemingly on and off "x points to retain Gold/Plat" offers we've seen QF do)l

Basically, I don't think high tiers of status should be available for those with the spending power to get there. We already have ways to make it easier (DSC) but even those require one's butt in metal tubes - so I'd prefer it stay that way - but I do see a place for a limited set of options for one to bup to retain or advance a level if close.

 

[aikman]

They should. Price it really high to more than cover the cost of providing the status benefits. Some people will buy it at any price. Extra revenue source. Share price goes up. Shareholders are happy.

 

[exceladdict]

That you can earn SCs by having enough points (via Points club classic reward redemptions) devalues the concept of SCs enough already.

SCs should only be earned from flying for it to truly be a frequent flyer program, rather than some generic consumer loyalty program.

You need a fair chunk of PC/+ flights to hit status. PER-MEL in U is half that of J, so it's still 9 return trips to hit gold. DSC promotions are the much bigger threat to devaluing the concept of SC.

The point of status credits is to encourage people to fly - esp with QANTAS or on QANTAS code shares.

While that remains the point, how would it make sense for QANTAS to sell them ? (Other than in limited circumstances such as topping up if you are just about to miss).?

I think the top up circumstance and the "more dollars than time" circumstance. Someone who has money to burn but not quite influential enough to be CL. They'd probably happily drop 10k on WP as a business expense for their irregular flying, so they can then visit the F lounge on an annual family trip.

Don't know what the profit margin on flying is but as the article said, $10k for 0 effort vs x% of 1400 SC worth of flying would surely be something the accountants run the numbers on.

As noted above, having status is only really helpful for those flying (except in programs which provide extra on ground perks, like linked status in hotel brands), so if one did buy up to say Platinum, but only actually flew infrequently, then the effect is probably marginal. I would also suspect that those who would be inclined to buy large amounts of SC would either be typically motivated to buy up to retain (eg: Gold) which makes sense if one might fall a bit short, or those looking to earn high status for a spend without putting one's BIS.

Agree, a firm option for retain is probably the sweet spot.

 

[levelnine]

We can infer a few things from Qantas' past practice about how the future might play out:
1. Qantas will have no hesitation giving out status credits for non-flying activities if they need to prop up their elite numbers.
2. They tend to allow people to purchase status credits indirectly rather than directly — as part of a card sign-up bonus, as part of a loyalty initiative (Green Tier), etc.
3. If they ever did allow people to buy them directly, it would be at a rate that is absurd for most customers to consider (in the same way that Qantas sells points directly, but at a rate that is absurd for most customers to consider).

 

[Pushka]

Maybe just a maximum number of say, 50 if you end up just shy of qual or requal.

 

[ChrisMars]

I am in favor for requal members, for say a percentage x like 20% and for say only the last 30 days of a member year, not contributing to Life time status. A bit of a way to save some CO2 and some members time by avoiding unnecessary status run.
Then someone might say that a member might take a sc to reach the 80% sc required? I would say, there is a point at which members would consider status run + x% SC cash spend on sc not worth it. Just need to work out where is this x point,
Someone else might scream "devaluation" for others! The fact that people do status run, or buy it saving time and co2 is no differrent.
The fact that other airline does it is great I think. It s a win-win-win (ff member, airline, and planet). I am for it.

 

[SYD]

Maybe just a maximum number of say, 50 if you end up just shy of qual or requal.

VA lets you ”Buy” SCs via Flybuys. Something like a max of 10 SCs per month? (1x SC per $100). So never enough to let you ”buy” WP but maybe enough to incentivise punters to jump on a plane to gain/attain status.

 

[muppet]

No.

That you can earn SCs by having enough points (via Points club classic reward redemptions) devalues the concept of SCs enough already.

SCs should only be earned from flying for it to truly be a frequent flyer program, rather than some generic consumer loyalty program.

People redeeming for classic rewards are truly flying…. different mode of payment, but they flying.

 

[Happy Dude]

VA lets you ”Buy” SCs via Flybuys. Something like a max of 10 SCs per month? (1x SC per $100). So never enough to let you ”buy” WP but maybe enough to incentivise punters to jump on a plane to gain/attain status.

QF has a way to go to get near VA. VA also has credit card tie-ins where SCs are awarded for spend (ie Amex Velocity Plat gives 100SCs for 50k spend). Plus they often have SCs for credit card signups, most recently 200SCs. Our family took full advantage of that and the 3x SC promo and locked up WP for the year for a relatively small outlay. Now we just need to fly somewhere to actually use it.

 

[daninsydney]

Interesting thread, and timely for me, I'm going to end up literally 1 point shy of maintaining Platinum unless I do a status run next week.
The idea of $100 for 5 points as per the article is cheaper then a 'status run' and better for the environment (as I don't have any 'nice to see' destinations in mind).
I don't think purchasing a small amount of points would offend the 'must fly to earn' school of thought.

 

[SYD]

Interesting thread, and timely for me, I'm going to end up literally 1 point shy of maintaining Platinum unless I do a status run next week.
The idea of $100 for 5 points as per the article is cheaper then a 'status run' and better for the environment (as I don't have any 'nice to see' destinations in mind).
I don't think purchasing a small amount of points would offend the 'must fly to earn' school of thought.

OT, but there are other posts/threads here with recent experience of being comp’d status when short a couple of SCs. But you need to call up.

If you haven’t already, GT is an easy 50 SCs.

 

[GrahamBRI]

The point of status credits is to encourage people to fly - esp with QANTAS or on QANTAS code shares.

Agree…… but noting if I paid a hefty sum for status with Qantas, I will still be loyal to them, to get the return on my investment and the perks of the status. Accor and IHG, both offer options to “buy” status and I for one have been a frequent user of their paid programs. So I think there should be a model that could work for Qantas.

 

[Bundy Bear]

SC should be only earned from flying,

 

[p--and--t]

If you have the money and its priced correctly - Why not.

You can buy QC for lounge access etc

Other airlines (including VA do it)

Would reduce global warming from needless status runs.

 

[GrahamBRI]

Would reduce global warming from needless status runs.

I carbon offset my status runs……. to get green status and more status credits …… so that is what correctly priced status credits look like.

 

[henrus]

How much should they charge… $5k per year for Platinum?

The cheapest is generally an average around $3 per SC and with 1400 SC required to earn ($4200) I’d say $5k is a fair enough mark given QF is getting cash without having to provide a flight in return.