Article: Latest Changes May Not Fix Qantas’ Reward Availability Problem

[Gremlin]

Qantas Loyalty absolutely care about how many points they sell (ie their revenue). That's what I said. I made no claim about the number of CR+ redemptions. Talk about a strawman.

You're talking about CR (lack of) availability as the catalyst for your points chasers to leave. The trade-off isn't $500k of card spend to then use on CR+ redemptions, it's paid sales.

Your strawman is that you flip between QF and Loyalty depending on your argument. Absolutely Loyalty will lose out in this scenario. But to the net benefit of group.

Your claim was that this change 'will disproportionately impact disloyal customers more than loyal ones'. If it ends up replacing the current disloyal customers with a set of even more disloyal customers with even bigger points balances to throw around, the current loyal customer is the biggest loser. The current points chasers will move on to other pursuits — as you say, the whole point is they weren't that attached in the first place. The current loyal customers who find themselves outbid at every turn by the American points broker and American points whale are going to be hurt the most.

The sky is falling, isn't it? This can be easily managed through segmented markets. Far harder to manage within market.

 

[levelnine]

Your strawman is that you flip between QF and Loyalty depending on your argument. Absolutely Loyalty will lose out in this scenario. But to the net benefit of group.

Where have I once talked about the revenue or profitability of the Qantas Group? This is a discussion about a reward program lol.

Indeed, it makes no sense to talk about the profitability of the Qantas Group in this context because that depends on factors entirely unconnected to the Loyalty business. The Loyalty business could be wound up tomorrow and Qantas could still be a profitable airline. Conversely, Qantas Loyalty could be running 50% operating margins and the airline could still go bankrupt tomorrow.

The sky is falling, isn't it? This can be easily managed through segmented markets. Far harder to manage within market.

It isn't. But that was never my claim, was it?

 

[Gremlin]

ndeed, it makes no sense to talk about the profitability of the Qantas Group in this context because that depends on factors entirely unconnected to the Loyalty business.

Okay. You seem to think that loyalty businesses run very differently to how loyalty businesses actually run. Most, if not all, will absolutely cross-charge in and out of their 'main' business. It is virtually impossible to consider the revenue and profit of a loyalty business as disconnected from its parent. The performance directive to the Loyalty division, whether it's a separate legal entity or not, will be dictated by the overall ambitions of the group. Particularly for capacity constrained businesses such as airlines/hotels, etc.

I can pretty much guarantee that Loyalty are not making decisions on the availability of CR independent of QF's Revenue Management, and that QF will be looking at this holistically, not just through a Loyalty lens.

The current loyal customers who find themselves outbid at every turn by the American points broker and American points whale are going to be hurt the most.

QFF have a relatively intractable problem in terms of reward demand. There is a large demand for premium cabin, international redemptions, originating out of Australia and it's not met by capacity. It can't be met by capacity. Basically, there ain't enough seats to get QFFers off our isolated rock.

But a points whale living in Boston, for example, can easily expand QFFs customer footprint, at margin, without adding materially to that intractable problem. An equivalent points whale, living in Melbourne, becomes far more problematic for QFF because they will disproportionately add to that unfulfilled demand gap. The points whale in Boston, even if they are more disloyal than the points whale in Melbourne, is a far more attractive customer for QFF.

 

[levelnine]

Okay. You seem to think that loyalty businesses run very differently to how loyalty businesses actually run.

This is helpful as it clarifies where the impasse is. You think all loyalty programs are the same — my guess would be because of your professional background in a non-airline loyalty program (as you cannot stop pointing out). You mistakenly think Bakers Delight's loyalty program is simply a variation on Qantas' loyalty program. That's why you say 'It is virtually impossible to consider the revenue and profit of a loyalty business as disconnected from its parent.' This statement is not even remotely correct.

Indeed, that's how Aeroplan operated from 2002 to 2020 and how IAG Loyalty operates today (Finnair and IAG Loyalty are not part of the same group and do not share overall ambitions). Those are not examples of loyalty merely being a 'separate legal entity' — they are entities entirely disconnected from their 'parent'. The key difference between the two types of loyalty program is that, for Bakers Delight, their only commercial relationship is with the bread baking arm of the company, while, for Qantas Loyalty, the flying divisions are not even the biggest purchaser of their points (the banks are) and the flying divisions are not the sole redeemer of points (they can be redeemed for an ever-expanding range of non-flying purchases).

Loyalty are not making decisions on the availability of CR independent of QF's Revenue Management, and that QF will be looking at this holistically, not just through a Loyalty lens.

What you miss is that Loyalty and the flying divisions are in competition with each other. Indeed, the media reports surrounding the release of Classic+ revealed as much — the flying divisions were unhappy with the rate Loyalty had negotiated with them to purchase classic award seats (Loyalty was stealing margin from International, in particular). The response was the release of fewer seats to Loyalty. The introduction of Classic+ was an attempt to bridge the impasse — more seats but at higher internal purchase rates. But Loyalty had to take a hit to earnings projections for it. There is nothing holistic about this dynamic — it is simply the end result of a negotiation between different parts of the business, each with their own KPIs.

But a points whale living in Boston, for example, can easily expand QFFs customer footprint, at margin, without adding materially to that intractable problem.

Ahh, now I see where you're mistaken about the US market. You think the Boston points whale will be acquiring Qantas points to redeem on AA flights between BOS & JFK. They won't do that — they have better options — unless Qantas Loyalty decides to sell the points to US banks for a loss (ie less than they will get from AA).

Instead, the decision to lean into the US market will add to the intractable problem in that:
- those 'disloyal' Australian churners (the ones you thought Qantas had discarded) will acquire US cards and come back into the program through the backdoor of the US market, having acquired the points at even lower cost given all the financial engineering possible in the US system (this is what already happens in the Canadian and, increasingly, the UK market); and
- the Boston points whale will sell their points to a broker who will then use them to purchase seats for a 'disloyal' Australian customer, taking that premium cabin, international redemption away from a 'loyal' Australian customer (this is what already happens in a huge number of markets).

 

[Johnxx]

Do I take it most on this thread only want to fly Qantas? And a good percentage of them to London
As a Bronze churner with no desire to ever travel to London I've flown J with Fiji, Malaysian, Air France, JAL, Cathay and Sri Lankan and also F with Emirates.
Never flown Qantas in a premium cabin and don't expect to ever be that lucky but it's still a great program.

 

[MelbFlyer]

Do I take it most on this thread only want to fly Qantas? And a good percentage of them to London
As a Bronze churner with no desire to ever travel to London I've flown J with Fiji, Malaysian, Air France, JAL, Cathay and Sri Lankan and also F with Emirates.

It's all about choice and opinions imo.

Firstly, QF redemption seats generally cost less in both points and taxes most, if not all of the time.

An example - MEL to HKG:
QF business - 68.4k pts + taxes
CX business - 75k pts + taxes

Secondly, there's generally more options / routes for QF flying to / out of Australia therefore that's another factor people sway towards Qantas. Another factor could be QF's safety record.

If CXs redemption cost as per the above example were the same as QFs and the timing was right, I'd probably go for CX tbh as I find their reverse herringbone layout nicer than Qantas' straight on / staggered seat layout.

For me, I'm a bronze member and don't mind other airlines other than QF - I've used points for AY / BA / CI / CX / JL business redemptions in addition to QF.

I generally also travel mainly to Asia so rewards availability to / from places like SIN and HKG are important. Places like LAX / LHR, not so much as I don't travel to those places.

With that being said though, I've got the right to exercise my right to not want to transit in places like Mumbai etc. If someone else doesn't mind that, then that's their choice.

Everyone's travel plans and opinions are different - ie. I'd probably not consider travelling on UL if going to Europe, I'd rather QF and then EK, or CX for example.

 

[Gold Member]

It's all about choice and opinions imo.

Firstly, QF redemption seats generally cost less in both points and taxes most, if not all of the time.

An example - MEL to HKG:
QF business - 68.4k pts + taxes
CX business - 75k pts + taxes

Careful. I could quote you plenty more Frequent Flyer programs where the asking price is 40-50K points/miles and the taxes and surcharges significantly less. And they offer far more availability to boot. Comparing it to just CX and drawing a conclusion on that basis is not accurate.

Secondly, there's generally more options / routes for QF flying to / out of Australia therefore that's another factor people sway towards Qantas.

Well of course. And that’s what they’re relying on to charge their exorbitant prices and keep you engaged with their Frequent Flyer Program. But simply offering the direct routes doesn’t equate to ample availability. In fact, competing programs offer far more availability.

It's all about choice and opinions imo.

For me, I'm a bronze member and don't mind other airlines other than QF - I've used points for AY / BA / CI / CX / JL business redemptions in addition to QF.

I generally also travel mainly to Asia so rewards availability to / from places like SIN and HKG are important. Places like LAX / LHR, not so much as I don't travel to those places.

With that being said though, I've got the right to exercise my right to not want to transit in places like Mumbai etc. If someone else doesn't mind that, then that's their choice.

Everyone's travel plans and opinions are different - ie. I'd probably not consider travelling on UL if going to Europe, I'd rather QF and then EK, or CX for example.

Nice to hear it works for you personally as a Bronze member with your travel patterns. As you correctly state, everyone’s experience will differ, but the general consensus is that it doesn’t work for Bronze members, and increasingly less so for Platinum+ status members in recent times. The lack of premium cabin availability on more desirable routes is the main sticking point.

 

[MelbFlyer]

Careful. I could quote you plenty more Frequent Flyer programs where the asking price is 40-50K points/miles and the taxes and surcharges significantly less. And they offer far more availability to boot. Comparing it to just CX and drawing a conclusion on that basis is not accurate.

Appreciate where you're coming from, but here we're specifically talking about the QFF program, not other programs.

The example was just that, an example and does not cover everything / every program, which was not the intention.

We could discuss other programs ie. Avios, Asiamiles etc and their availability or lack thereof, but that would be for a different time and thread.

The lack of premium cabin availability on more desirable routes is the main sticking point.

I 100% agree on this when it comes to redeeming QFF points via the QFF program.

 

[Gold Member]

Appreciate where you're coming from, but here we're specifically talking about the QFF program, not other programs.

The example was just that, an example and does not cover everything / every program, which was not the intention.

Sure. But the way you presented your evidence by selectively comparing to another FFP with a higher points redemption suggested otherwise. Seems a bit contradictory if purely “taking about the QFF program, not other programs”.

 

[MelbFlyer]

But the way you presented your evidence by selectively comparing to another FFP with a higher points redemption suggested otherwise. Seems a bit contradictory if purely “taking about the QFF program, not other programs”.

If you're talking about the below, the below is how much it costs for MEL to HKG via QF or CX via QFF.

An example - MEL to HKG:
QF business - 68.4k pts + taxes
CX business - 75k pts + taxes

On Qantas' website:

QF:
CX:


Just in case it wasn't clear, I'm only talking about redemptions on Qantas' website.

 

[evanb]

To add fuel to the fire, some analysis using data from Qantas on earning and membership. Is QFF just too successful?

Chart of the week #18: What's behind the recent Qantas Frequent Flyer changes?

Last week Qantas announced changes to the Qantas Frequent Flyer programme.

www.analyticflying.com

 

[Neil64]

I've been doing a lot of exploring over the weekend looking to answer this same question. I feel for ease of use, ease of acquiring points, ease of sign up bonuses.... Velocity is the way to go. The 1.55:1 transfer to KrisFlyer is also attractive I feel. Disappointing

I'm trying to use up the bulk of my Qantas points (not an easy task these days) and I now only focus on Velocity points due to the unbelievably better reward seat availability on international flights and the more reasonable credit card sign up bonus offers. We often hear about the dollar value of frequent flyer points but when it comes to QFF points we should now be factoring in the lack of premium seat reward availability, which I feel has created a form of point devaluation in itself.

 

[Neil64]

It's worth underscoring that very few people would fit into your travel pattern — solo travel on round-the-world bookings to clusters of esoteric locations.

Almost everyone else in this thread is much closer to the norm, by which I mean the typical Australian international traveller, even if they are not representative of the entire QFF member base as you've noted.

The norm is bookings for 2-4 people round-trip to Europe/Asia/North America with a strong preference for 1-stop to Europe and non-stop to Asia/North America, often in peak or semi-peak periods.

Yes, there's a few people in this thread who will make Qantas work for them now and into the future, but once you dig a bit deeper, you find they are almost all solo travellers (or dual at most), all willing to do inconvenient things to get their destination (stop multiple places, combine cash & points bookings, etc) and almost all able to travel outside of peak periods. There's nothing wrong with being outside the norm, but it does undercut the applicability of statements like 'Qantas works for me'. It also works for Vanessa Hudson — that's not much use to anyone but Vanessa Hudson.

Perfectly put.
I'd like to add that I find it fairly easy snagging premium seats out of Australia using Velocity points, which unfortunately is not the case with Qantas FF. And Velocity don't seem to muck around with the releasing of reward seats (batch releasing seats) like Qantas seems to. I've been a keen points earner and spender for over twenty years but recently I get the feeling that Qantas is just making it harder than ever to make use of their FF program.

 

[Neil64]

I'm pretty sure that they could prove this claim, they aren't saying that 'We have X amount of reward seats from a major capital city to another major international capital city' which is how most people interpret it. Let's be honest a majority of the five million are most likely to and from places no one is or want to go to and I'm pretty confident the ACCC would have asked this question already.
I think part of the problem is also that people are now conditioned that CR tickets are released 353 days out but as per one of the links in the article they are now releasing in batches therefore relying on a bit of luck (is this fair? probably not)

It's a case of 'Could' but choose not to. It's easy to make big statements like 'we're releasing 5 million reward seats' but without proof or specifics it's meaningless.

 

[evanb]

It's a case of 'Could' but choose not to. It's easy to make big statements like 'we're releasing 5 million reward seats' but without proof or specifics it's meaningless.

To add fuel to the fire, some analysis using data from Qantas on earning and membership. Is QFF just too successful?

Chart of the week #18: What's behind the recent Qantas Frequent Flyer changes?

Last week Qantas announced changes to the Qantas Frequent Flyer programme.

www.analyticflying.com

Literally the data in post 111 shows an increase in redemptions of 16 billion points in 2024 alone, 46 billion per year since 2019. Given the wide range in pricing of rewards, 5 million may be a significant understatement.

 

[Valdek]

I'm trying to use up the bulk of my Qantas points (not an easy task these days) and I now only focus on Velocity points due to the unbelievably better reward seat availability on international flights and the more reasonable credit card sign up bonus offers. We often hear about the dollar value of frequent flyer points but when it comes to QFF points we should now be factoring in the lack of premium seat reward availability, which I feel has created a form of point devaluation in itself.

And there we have another example of a departure from the QFF loyalty program.
It would be hard to believe the Qantas' current management, consciously eliminating benefits the airline itself created years ago, didn't foresee such consequences.
These actions are deliberate. We are witnessing the gradual dismantling of the Qantas FF program.
At least part of it associated with the long-haul international flights. For now.

Interestingly, the airline has never before distributed such a massive volume of FF points to existing and prospective members so aggressively, while at the same time severely reducing the number of reward seats on its flights.
Is there any logic to this other than an ideal scenario for total devaluation?

But that's not the worst part.
As found in the comments above, long-standing loyal members of the Qantas FF program are seeing Qantas as an institution that has failed them. It has even been said, "I will avoid them like a plague".

For them, for a start, it will be choosing and moving to a competitor. When they succeed, they will not return. They will remain loyal to the new arrangements. Just as they had been loyal over the years to those who had now let them down.
Disappointing.
However, if Qantas management cannot foresee the consequences of its actions, then it ceases to be surprising that from its position as one of the world's leading airlines, Qantas is now below 20th in the international rankings and falling lower and lower every year.

 

[JessicaTam]

[mod hat]
A number of off topic posts have been removed, including some that discussed moderation activities.

Should this same personal off-topic discussion re-occur, here or elsewhere, infractions will be issued.
[/mod hat]

 

[evanb]

And there we have another example of a departure from the QFF loyalty program.
It would be hard to believe the Qantas' current management, consciously eliminating benefits the airline itself created years ago, didn't foresee such consequences.
These actions are deliberate. We are witnessing the gradual dismantling of the Qantas FF program.
At least part of it associated with the long-haul international flights. For now.

Interestingly, the airline has never before distributed such a massive volume of FF points to existing and prospective members so aggressively, while at the same time severely reducing the number of reward seats on its flights.
Is there any logic to this other than an ideal scenario for total devaluation?

But that's not the worst part.
As found in the comments above, long-standing loyal members of the Qantas FF program are seeing Qantas as an institution that has failed them. It has even been said, "I will avoid them like a plague".

For them, for a start, it will be choosing and moving to a competitor. When they succeed, they will not return. They will remain loyal to the new arrangements. Just as they had been loyal over the years to those who had now let them down.
Disappointing.
However, if Qantas management cannot foresee the consequences of its actions, then it ceases to be surprising that from its position as one of the world's leading airlines, Qantas is now below 20th in the international rankings and falling lower and lower every year.

But these anecdotes aren't supported by data. The number of points redeemed annually has increased by 10% in the last year and 27% since 2019. The number of members has increased similarly.

 

[Neil64]

I am 33 year member with 4 million points between me and the Mrs and no where to go!

Have you considered

But these anecdotes aren't supported by data. The number of points redeemed annually has increased by 10% in the last year and 27% since 2019. The number of members has increased similarly.

Maybe, but how much of that points redemption increase is related to the introduction of Classic Plus

Post automatically merged: Yesterday at 9:24 PM

Have you considered

Maybe, but how much of that points redemption increase is related to the introduction of Classic Plus

And what percentage of that increase was redeemed on partner airlines? Again, without specifics it’s hard to be a believer.

 

[Valdek]

But these anecdotes aren't supported by data. The number of points redeemed annually has increased by 10% in the last year and 27% since 2019. The number of members has increased similarly.

This is true; the airline's official operational success figures are based on these statistics.
The problem is that the statistics are mostly created in such a way that they result in high bonuses for their authors.
However, simple reality shows clearly that for some time now, getting a reward seat in premium class on an international flight has become almost impossible. This has not been the case before.
So what are we to believe in? In printed statistics figures, or in the reality we all encounter first-hand every day?
You only need to read what other program members post in the current thread.
Even the title alone leaves no doubt:
"Latest Changes May Not Fix Qantas’ Reward Availability Problem"
There is a problem. A big one.
Most experienced and active loyalty members see this clearly because they experience it directly.
How will you answer their allegations?
They must be wrong because the official statistics say otherwise?