Some 10 million frequent flyers saw their points-earning potential lurch into strange new territory on Tuesday as sweeping changes to the Qantas loyalty scheme kicked into gear at the start of the new financial year.
Arguably the biggest shake-up in the program’s 27-year history, it’s not beyond the pale to suggest that every single Qantas Frequent Flyer member will be affected in some way.
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This includes the bulk of Australia’s business travellers, both on domestic and international flights.
Qantas trumpeted the changes as 'Fairer Flying' – a slogan which for the social media set was akin to painting a big red bullseye on the Red Roo’s chest.
And the communication of the changes – which struck me as hurried, ill-executed and confusing – didn’t help matters.
At the core of the changes, Qantas travellers will now earn frequent flyer points and status credits based on the cost of their ticket rather than the distance flown.
Here’s how things shape up in the new world order of the Qantas Frequent Flyer scheme.
Know your zone
A new zone-based system splitting up the network of Qantas and its partners is divided into a score of regions such as Domestic Short, Medium and Long flights, and East Coast Australia to Asia.
In turn, each of those zones comes with its own unique number of points and status credits based on the type of ticket you buy.
For example, a flight from Sydney, Melbourne or Brisbane to New Zealand encompasses the following earning rates: 1000 points and 20 status credits in discount economy; 1375 points and 25 status credits in standard economy; 1750 points and 40 status credits in flexible economy; and 2500 points and 80 status credits in business class.
While Sydney-Melbourne, Sydney-Brisbane and Melbourne-Brisbane flights are still covered by Qantas’s minimum point guarantee based on their relatively short distance, that minimum or discount economy fares drops from 1000 points to 800 points.
However, the ‘flexible economy’ tickets favoured by many business travellers will get a bump from 1000 to 1200 points.
New ticketing tiers
Qantas has also expanded the previous five ticket categories or booking classes to eight ‘core’ groups, each of which earns a different number of points and status credits.
That makes it more important then ever to check what type of ticket you’re actually buying if you want to maximise your frequent flyer haul.
The new scheme also does away with the old and confusing ‘cabin bonus’ for travellers sitting in premium economy, business and first class, which was also tied to their Qantas Frequent Flyer status, in favour of an increased baseline of points for those better-than-economy cabins.
The bottom line here? You'll start with more points in your pocket.
Reduced status bonus for economy
However, the additional side serving of points known as the ‘status bonus’ has been capped at the flexible economy rate for premium cabins rather than the former allocation of a flat 50 per cent bonus for Silver, 75 per cent for Gold and 100 per centfor Platinum calculated against the distance travelled.
So if you're in premium economy, business or even first class, your status bonus will be counted against the number of points issued for a flexible economy ticket.
Because the status bonus is applied onto the baseline of frequent flyer points according to your ticket, and that baseline has gone up for the more expensive seats, it's good news for travellers at the pointy end but bad news if you're in the cheap seats.
For example, a Gold-grade frequent flyer travelling Sydney-Singapore in business class before June 30 earnt 8793 points including their 75 per cent status bonus, but from July 1 the total has jumped to 11,700 points.
But a Platinum frequent flyer doing Sydney-Los Angeles in economy will see their haul slashed from 14,982 points to 9000 points.
The status credit shuffle
One unexpected wrinkle: the number of status credits earned on Qantas flights will in many cases increase under the new zone-and-fare-based system, especially for those on business class fares.
At the same time, many route/ticket combinations which don't see a bump in status credits will remain the same as under the old scheme.
It’s a silver lining – or, to be more correct, a gold and platinum lining – to the cloud of QFF changes.
Business travellers making long-distance international trips on flexible fares will find it much quicker to climb up the status ladder, as long as they fly with Qantas rather than any of its Oneworld partners.
That's because the number of status credits earned on British Airways, Cathay Pacific and Co. has been slashed by as much as half, compared to the current rate.
Qantas has yet to reveal if the number of frequent flyer points earned on those airlines will follow suit, but the smart money says another cut lies ahead.
This sends a clear signal that for Qantas, 'loyalty' now means loyalty to the Flying Kangaroo first and partners second.
Travellers take a hit
Many savvy business travellers, having studied the impact of these changes on their past and future trips, are already modifying their travel plans.
In some cases this means their own previously-exercised loyalty to Qantas has gone out the window.
“I needed to make a short-notice trip to Shanghai later this month,” says one colleague who is the Melbourne-based managing director of an international manufacturing business.
“Ordinarily this would involve jumping on QF129 with a connecting flight from Melbourne, although from a timing perspective this is quite inconvenient.
“So for $300 less I’m flying Singapore Airlines with a schedule that suits me to perfection.
“This is the first time I have shunned Qantas in this way. I’ve always accepted the higher prices and timings that didn't quite suit. I've made allowances so I could earn the miles and, to a lesser extent on these trips, the status credits.
“Whilst I'll still be traveling a lot with QF in the next 12 months or so, I think this is a watershed moment for me.”
- Which frequent flyer scheme should you join?
How will this week’s changes impact your travel plans? Are you better off, worse off, or simply past caring?
David Flynn is a business travel expert and editor of Australian Business tripler.
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