Qantas rolls out Classic Plus Flight Rewards

[Danger]

I think a member earlier referred to a Citi analyst's take. Here's an excerpt from an online article in The Australian.

A report by Citi Research analyst Samuel Seow said prior to Covid-19, the Qantas (red tail) airline carried 31 million passengers, and offered about 40 million seats for sale.

Mr Seow said given that 20 million seats represented 50 per cent of Qantas’ capacity, the airline “could not be expecting redemptions anywhere close to this number”.

“It appears the 20 million seats may be priced, so only a low percentage are redeemed,” wrote Mr Seow.

“We estimate $70m is the actual investment in the change (and) our back of the envelope equation suggests this equates to potentially 10 per cent of 20 million seats being expected to be redeemed.”

Mr Seow’s report surmised that the downward adjustment Qantas made in its forecast earnings for the Loyalty sector in the 2024 financial year, from $550m to around $500m to $525m, was largely an accounting change, given that Classic Plus seats were not available until July 1.

“Overall, we largely see the actual cash investment as small,” he said.

“Subsequently, we estimate only modest increases in engagement, but similarly limited risks of cost increases.”

And the Mumbrella website (marketing and PR-focused, I think) had this to say:

Phoebe Netto, founder and managing director, Pure Public Relations
That may not actually be the case, but it shouldn’t be this hard to make that distinction. Ultimately, what they have announced will have a neutral impact on their reputation at best, and to some, it will actually increase the cynicism towards the brand.
Qantas has a history of announcing credits and rewards that were convoluted, unusable and with changing conditions. From confusing pandemic credit extensions to unclear deadlines, the airline has proven itself a bad gift giver many times over.

Luke Holland, head of strategic communications, Think HQ
All of which makes the Qantas announcement seem like a sleight of hand – a distraction from deeper cultural problems. And I’m not sure Aussies will buy that in the long term, even if they can use their Points for the purchase.

Sally Branson, crisis communications expert
My understanding is that for a new CEO, this is the sort of program change that can herald a new era – but when your base is already revolting – is this the right thing to be focusing on to create a new era and leave the crisis of the past behind? Going by the comments on the Qantas Points Collector page, it has been poorly received, and the general gist is “tell me you’re giving me less for more” and that the move is “bad” and hard to understand.

 

[trippin_the_rift]

Some observations:

- Qantas has completed dozens of surveys and focus groups and has decades of customer feedback on the topic, spent god-knows how much on big4 consulting firm fees -- and Classic Plus is the best they could come up with. Let that sink in, on how disconnected management are.
- Nobody in QF management has experience working for any other airline in the past 2 decades (excluding Cam Wallace - who worked for a smaller version of Qantas).
- QF has more 'CEO's' than the worlds largest airlines, all whom are paid more than some of the worlds most high profile airline CEOs.
- QF Loyalty has 15M+ members, all competing for the same restricted inventory, whereas, other airlines, like SQ, have 7M+ members competing for more intl premium seats.
- Everyone wants more seats for premium cabin intl classic award redemptions, yet Qantas, isn't even in the top 5 intl airlines for capacity in/out of Australia. Take out New Zealand, and they're barely in the top 10.
- QF Loyalty is battling against QF Airline Co for profitability. Neither is willing to take a hit. Loyalty will inevitably lose out, and thus, points will never increase in value.

I suspect what will come out of this is:

- Pressure from financial institutions on QF to lower (again) the cost per points (This will transpire as increased cost for classic awards, or less inventory, or both).
- A short-term increase in redemptions, mostly people trying to 'cash out' their points. Not members embracing the new product, but members burning in protests to get out.
- In 18-24months from now, due to the pressures of the above, classic awards will either increase in price, taxes+fees will increase, or begin to be phased out entirely.
- QF/Banks etc will be hauled in by some Gov committee about their use of terminology around "Fly to X from Y points" being deceptive since the number of actual seats on those sectors being almost non-available at that points price.
- Bank loyalty programs become more attractive versus transferring those points into airlines. More power to banks...awesome, just what the average credit card holder wants in their life!

Sadly, QF has painted itself into this situation.

And what is probably the best way to help QF get out of this situation (and bring more value back to the program), is to stop flying qantas, stop transferring credit card points into qf loyalty, and to stop feeding a broken system.

Virgin isn't any better.

All this raises a very valid point - are frequent flyer programs for Australians who don't travel internationally at least 3-4 times a year worth the investment?

Qantas is trying to make the most of the position they're in, using the same thinking that got them into this mess.
Over-hyping the classic plus launch is proof of this -- just read the comments from normal people on afr/news/reddit/flyertalk/aff etc... overwhelmingly negative.

Now might be a good time to take stock of what points you collect, and why.

 

[levelnine]

Virgin isn't any better.

All this raises a very valid point - are frequent flyer programs for Australians who don't travel internationally at least 3-4 times a year worth the investment?

Lumping Virgin in with Qantas isn't entirely fair imo.

If you're organised, you can readily get up to 4 J award seats to/from Europe on a good airline (SQ) at saver points levels at most times of the year, even peak travel periods. That's the very definition of a well-functioning program. I think this latest announcement is going to put pressure on that state of affairs, however, as more people move to Virgin.

But I do agree that the state of frequent flyer programs in Australia is fairly dire for the casual user.

It's a shame there isn't a simple cash back credit card in Australia like there is in the US. If there were, it would put immense pressure on the airlines to make their programs worth the effort over a card that earned 1-2% cash back on all transactions.

 

[flyguy77]

Sadly, QF has painted itself into this situation.

100%

You simply can't have never-ending growth on a FF program (members/profits etc) based around aspirational booking of a limited product (reward seats)

You'll just end up with frustrated members which is exactly what is happening.

You also won't take away said frustration by telling them they now need to collect 2-4x more points to book a Classic Plus.

Greed will ruin anything.

 

[Daver6]

Another interesting perspective on this change

'Another way they can screw us': Qantas pilots bristle at expanded frequent flyer program

The Flying Kangaroo launched its new points program to enormous fanfare and media attention. But as with so much at the airline, there's also plenty of smoke and mirrors.

www.crikey.com.au

 

[tdimdad]

You simply can't have never-ending growth on a FF program (members/profits etc) based around aspirational booking of a limited product (reward seats)
You'll just end up with frustrated members which is exactly what is happening.

That's why I refuse most loyalty programs, there's just no point in them. I shop so little overall, anyway, that it'd take years to get anything out of most programs. Well, that's - of course - because too much of my discretionary spending goes to travel...

QFF has made sense so far because I have been able to extract value from it. But it's hinged on CR's and upgrades (and the dream of a good OWA in the next 1-3 years) and if they get reduced or devalued, then the point of even attempting goes away.

 

[serfty]

It's a shame there isn't a simple cash back credit card in Australia like there is in the US. If there were, it would put immense pressure on the airlines to make their programs worth the effort over a card that earned 1-2% cash back on all transactions.

I know what you mean. There's the HSBC Global Everyday account which provide "up to 2% cash back for tap and pay transactions under $100" (up to $50 per calendar month) but that's a side earner, not a mainstay.

 

[I love to travel]

I can honestly say without emotion or vitriol that QF no longer works for me, I will just never be able to get enough points for classic plus J travel. Will try and find a half decent way to use my remaining 100k points and then all credit card points will be transferred to SQ until if/when they change their program. I think though my days of loyalty programs are coming to an end. It has been a great 10 years though and I grateful for the amazing flights I have had.

 

[MelbFlyer]

I concur with the above as well - I probably wouldn't be able to accumulate enough points in a reasonable timeframe (unless I save up for a few years etc) for regular Classic+ Rewards business seats due to the extra points required as compared to traditional Classic Rewards business seats.

I too am grateful that I was able to book (eventually after lots of hours on the phone with Qantas) and take a business OWA for my honeymoon last year, before these changes / points devaluation etc came in.

I do have a new CC that has a QFF sign-up bonus (working towards it now), but other than that I think I'll be moving my points accumulation efforts elsewhere moving forward.

 

[Seat0B]

I'm not a particular fan of Steve Hui from iFLYflat but he did have this to say on LinkedIn today that I thought was interesting:


It's the last paragraph that I agree with.

Totally agree with you and Steve Hui on this. I went through that exact thought process a couple of days ago over business class ski season flights to Japan. There are no CR on offer, but some very limited dates for CR+ showed up. Cash fares are quite expensive. However, common sense kicked in and I decided not to make any bookings at all for just now. I think I should be keeping my WP for next year courtesy of the DSC to be earned on my trip to see Seat Son over Christmas, and a few domestic flights and loyalty bonuses, so I maybe don't need to fly QF for the Japan trip. This might be a very good chance to try another airline/alliance. Although I will miss F Lounge in SYD, I think it's not worth the cost in either points or $ to fly QF. QF have lost the plot when a rusted on Fangurl like me, long term WP and LTG since 2013, is looking for a new alliance....

Between us, we have 3 million points. So at my current rate of burning those for domestic J flights, I'm not sure which will come first for the Seat Family - we use all the points or I reach LTP (only 41,000 SC to go!!) . Either way I will be long past travelling age before either of those happens.

Here is the info from the QF web site. Only CR+ available to depart SYD-HND anytime in January 2025.


I randomly selected 21 Jan as a suitable date for us, and this is the option. No CR for business seats, only CR+ at 174,700 points per person:




Coming back, not many dates available.



So I randomly selected 12 Feb for return and got this 222,300 per person for return flight:



This is not looking good. No CR seats, limited CR+ seats at crazy points levels and high taxes

 

[MelbFlyer]

This is not looking good. No CR seats, limited CR+ seats at crazy points levels and high taxes

397k points for just SYD to HND return in business - is very poor value compared to what I got for 318k under the business OWA which was Australia to Europe return with multiple legs (but then I guess it's apples vs pomegranates).

At the very, very least though, there are options to burn points, as opposed to if there was only cash or traditional CR seats.

 

[Seat0B]

It's a shame there isn't a simple cash back credit card in Australia like there is in the US. If there were, it would put immense pressure on the airlines to make their programs worth the effort over a card that earned 1-2% cash back on all transactions.

This!!!

 

[Doctore1003]

This!!!

Amex launched a cashback card (1% I think) a couple of years ago but discontinued it.

Amex MR cards effectively provide cashback as you can use points to pay for purchases

 

[tdimdad]

Looks like there are some individual sweet spots among all the noise. But they rely on the sales or otherwise low fares to be available.
In this example, the CR+ was lower both in points and fees. If you find those on a popular route, perhaps a lottery ticket that week will make sense.

 

[elanshin]

Totally agree with you and Steve Hui on this. I went through that exact thought process a couple of days ago over business class ski season flights to Japan. There are no CR on offer, but some very limited dates for CR+ showed up. Cash fares are quite expensive. However, common sense kicked in and I decided not to make any bookings at all for just now. I think I should be keeping my WP for next year courtesy of the DSC to be earned on my trip to see Seat Son over Christmas, and a few domestic flights and loyalty bonuses, so I maybe don't need to fly QF for the Japan trip. This might be a very good chance to try another airline/alliance. Although I will miss F Lounge in SYD, I think it's not worth the cost in either points or $ to fly QF. QF have lost the plot when a rusted on Fangurl like me, long term WP and LTG since 2013, is looking for a new alliance....

Between us, we have 3 million points. So at my current rate of burning those for domestic J flights, I'm not sure which will come first for the Seat Family - we use all the points or I reach LTP (only 41,000 SC to go!!) . Either way I will be long past travelling age before either of those happens.

Here is the info from the QF web site. Only CR+ available to depart SYD-HND anytime in January 2025.

View attachment 378583
I randomly selected 21 Jan as a suitable date for us, and this is the option. No CR for business seats, only CR+ at 174,700 points per person:

View attachment 378586


Coming back, not many dates available.

View attachment 378588

So I randomly selected 12 Feb for return and got this 222,300 per person for return flight:

View attachment 378584

This is not looking good. No CR seats, limited CR+ seats at crazy points levels and high taxes

Just a thing I've noticed, i think we need to go back to multi city view.

That calendar view with the current UI design will show Classic+ even if theres a CR J available as the classic+ Y is cheaper.

There are definitely times when i looked where all i see is C+, but lo n behold a CR J was there.

 

[CaptJCool]

Another interesting perspective on this change

'Another way they can screw us': Qantas pilots bristle at expanded frequent flyer program

The Flying Kangaroo launched its new points program to enormous fanfare and media attention. But as with so much at the airline, there's also plenty of smoke and mirrors.

www.crikey.com.au

Well when you look at it that way

It’s plenty of smoke and mirrors

Crucially, the new scheme does not apply to Jetstar or Qantas partners, including Emirates, which operates Qantas “virtual” European, Middle Eastern and African networks (two daily London flights and South Africa being the only exceptions). This largely cuts out major holiday destinations like Bali, Thailand, Vietnam and New Zealand where Jetstar flies the bulk of the Qantas group’s routes.

And when it’s extended to domestic flights again, major holiday routes such as the Gold Coast, Tasmania and Cairns are largely serviced by Jetstar flights, something that is sure to rub families looking to parlay points into cheaper holidays the wrong way.

As a brief aside

A comprehensive tally of the eye-watering amount of cash you've given Qantas

Just how much public money has the flailing national carrier received in the past few years?

www.crikey.com.au

$2.7 billion cash into Qantas or reduced costs over calendar years 2020 and 2021
Oh look at our couple of billion profits - and the audacity to have multiple share buybacks ($448 million as part of this current “investment” instead or re-investing into customer service

 

[Youfah Mizzum]

I went through that exact thought process a couple of days ago over business class ski season flights to Japan. There are no CR on offer

Interesting @Seat0B

I've just been through the exact same exercise. Same destination, same seat wish. Granted though, I was looking late Feb into March.

I found 1 CR late Feb (I think it was 25th) on the SYD-HND leg. This was on Monday when there was a huge flurry about the announcement.

Plenty CR in J for the return in March, usually on a Mon/Tues/Wed.

After a discussion with Mrs Mizzum about holiday plans for 2025, I jumped back on yesterday to book. As expected, the outbound J tix CR had gone. But still had Y available so booked Y for the outbound leg.
Return HND-SYD grabbed a CR in J. 2 pax.
Both Y and J were CR, not CR+.

I've got a seats.aero alert in case J pops up in the future. Not holding my breath.

 

[equus]

Amex MR cards effectively provide cashback as you can use points to pay for purchases

This. Platinum charge earns 2.25 points (except government and a few exceptions), and allows credit against purchases at 0.5 cents per point, so 1.125% cashback effectively.
Unless interchange rates increase (and surcharges and merchant fees likewise), this is about the top of the possible return, but offers a floor value.

Was excellent value (comparably) when during Covid they upped the rate to 1c per point (when travel benefits were not of much use).

 

[stm1sydney]

And while we are all chattering about this, along comes the following for Qantas to sneak in:

Qantas Raising Seat, Baggage & Lounge Fees​

Qantas will raise many of its service fees next week, with prices for seat selection, excess baggage and Qantas Club membership all going up.​

 

[stm1sydney]

Virgin isn't any better.

Not sure where that came from, but clearly VA is better in terms of its FF program. It is easy to redeem points for J flights on international partners. See also the Steve Hui analysis referred to in ean earlier post.