Should Qantas Sell Status Credits?

QantasLink Airbus A220, Boeing 717 and Bombardier Dash 8 at Melbourne Airport
Currently, the main way to bridge a status credit shortfall is to book a status run. This costs time and has an environmental impact. Photo: Matt Graham.

Some Qantas frequent flyers are prepared to go to great lengths – and expense – to ensure they don’t lose their coveted Gold, Platinum or Platinum One status. They value their status perks highly, and are even willing to book a Qantas status run to make up any extra status credits they need to secure them for another year.

Airlines are generally quite happy for frequent flyers to book status runs. They generate revenue for the airline that it wouldn’t have otherwise received. But the person doing the status run could end up wasting hours or even days of their time taking unnecessary flights. There’s also an unfortunate environmental cost to this.

Some people use status runs as an opportunity to visit a new destination, and are happy to take the flights because they enjoy travelling. But there’s another group of people that purely do it for the status credits.

It got me thinking. Would it make sense for Qantas – or other airlines, for that matter – to simply let members buy status credits? That way, the airline still generates incremental revenue, but without the associated cost of flying the passenger. And program members can avoid the time spent and environmental impact of taking unnecessary trips to another city or country.

To be clear, I don’t think Qantas will do this and I’m not suggesting it’s something they’re even considering. It’s a purely hypothetical question. But I think it’s an interesting idea that’s worth discussing.

How could this work?

I don’t think it would make sense for Qantas to allow people to simply “buy” Platinum or Platinum One status without doing any flying. If it became too easy to earn status, this could dilute the benefits for genuine frequent flyers who’ve earned their status the traditional way.

Couple dining in the Qantas First Lounge in Sydney
Platinum frequent flyers can use the Qantas First Lounge. Photo: Qantas.

But, as an example, Qantas could provide an option to purchase up to 200 status credits per year at an exorbitant price of around $100 per 5 status credits. Those status credits don’t necessarily have to count towards lifetime status or any Loyalty Bonuses.

There are plenty of cheaper ways to earn status credits by actually flying, so it wouldn’t create a perverse incentive to stop flying with the airline. And by capping the number of status credits a member could purchase each membership year, it ensures that tiered frequent flyers still have to do a fair bit of real flying.

What this would do, though, is provide an alternative to booking an unnecessary trip for frequent flyers who are just a small number of status credits short of upgrading or retaining their current status tier.

For example, if someone was 20 status credits short of retaining Platinum and had no further trips planned in their membership year, they could simply pay $400 instead of spending a day unnecessarily flying from Sydney to Melbourne and back.

In this scenario, Qantas would make $400 of revenue without bearing the cost of actually flying the person from Sydney to Melbourne. The airline could then sell the seats on those flights to another person. And the member could spend the day with their family or productively working, instead of at airports.

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Other ways to earn Qantas status credits

There are already a few ways to earn Qantas status credits from means other than flying, although they are few and far between.

For example, you could earn 50 status credits by becoming a Qantas Green Tier member.

You can also:

  • Earn 50 status credits each time you earn a Qantas Loyalty Bonus,
  • Roll over up to 100 status credits as a Points Club Plus member,
  • Earn bonus status credits with a Qantas Premier Titanium credit card, and
  • Earn double status credits by booking during special promotions.

But most of these methods only earn you extra status credits in conjunction with flying.

Other airlines already do this

Multiple Oneworld and Star Alliance frequent flyer programs already sell their equivalent of status credits. In each case, there are annual purchase limits. You couldn’t simply buy your way to top-tier status without flying at all.

Here are a few examples of programs currently doing this:

Frequent flyer programCostAnnual purchase limit
Aegean Miles+Bonus (Star Alliance)€50 per 500 Tier miles1,000/year for Blue members
2,000/year for Silver members (~25% of Silver renewal)
3,000/year for Gold members (~25% of Gold renewal)
Finnair Plus (oneworld)Exchange 3 Avios for 1 tier point7,500 tier points/year for Basic & Silver members
22,500 tier points/year for Gold members
40,000 tier points/year for Platinum & Platinum Lumo members
Qatar Airways Privilege Club (oneworld)USD25 per QpointApprox. 50% of the usual earn requirement (varies by tier)
Turkish Airlines Miles&Smiles (Star Alliance)USD70 per 1,000 Status Miles5,000 miles/year for Classic & Classic Plus members
10,000 miles/year for Elite & Elite Plus members

Oneworld’s Royal Air Maroc Safar Flyer also offers a subscription that lets you earn double or triple Status Miles on Royal Air Maroc flights. And Star Alliance’s United MileagePlus offers elite status buy-ups.

Air France & KLM, SkyTeam members, don’t directly sell XP (their equivalent of status credits). But members can earn XP by donating money or miles to sustainable causes.

Qatar Airways Boeing 787-9 Dreamliner
Oneworld’s Qatar Airways already sells Qpoints, which count towards status attainment. Photo: Qatar Airways.

Why Qantas probably won’t sell status credits

One industry insider opined that Qantas wouldn’t and shouldn’t sell status credits because it would devalue its loyalty program. They also suggested that putting a monetary value on status credits could be a bit of an accounting nightmare.

I’m not necessarily suggesting that Qantas should sell status credits. The point of frequent flyer programs is (or at least, traditionally was) to reward people who fly and encourage members to fly more. There could also be Oneworld restrictions preventing airlines from doing this, although that seems unlikely as Qatar Airways currently sells Qpoints.

But given the potential for mutual benefit to airlines, customers and the environment, I think it’s an interesting hypothetical question to ponder.

Qantas does already offer some Gold and Platinum members the option to redeem Qantas points in exchange for renewing their status for another year. So the concept is not entirely unprecedented.

Do you think Qantas should sell status credits? You can share your views on the Australian Frequent Flyer forum:

The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 90 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil & Kazakhstan. His interests include aviation, economics & foreign languages, and he has a soft spot for good food and red wine.

You can connect with Matt by posting on the Australian Frequent Flyer community forum and tagging @AFF Editor.
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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.

Reply 7 Likes

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

Reply 4 Likes

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?

Reply 1 Like

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.

Reply 3 Likes

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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.

Reply 2 Likes

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.

Reply 3 Likes

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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).

Reply 4 Likes

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

Reply 6 Likes

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.

Reply 2 Likes

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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.

Reply 3 Likes