Qantas frequent flyers face deal change
Qantas frequent flyer members have lashed out on social media at the airline's decision to change how points are earned.PT0M38S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-35n8p 620 349 March 28, 2014
The changes to Qantas Frequent Flyer Program could further rattle a travelling public already wary of the upheaval at the national carrier and affect the large number of partner businesses that use probably the best known loyalty program in the country to help sell their own services.
On Thursday night, Qantas announced major changes to the ability of Frequent Flyer members to earn and burn points, including a reduction in what they can earn from cheap fares and the status credits from flying on oneworld partner airlines.
People are fed up with Qantas making changes that worry them.
Qantas has told its more than 9 million frequent-flyer members the changes are aimed at aligning the number of Qantas points and status credits they earn more closely with the fares they pay, where and when they fly and the airline they fly on, rather than on the miles flown.
The email sent to frequent-flyer members informing them of the changes
These credits determine the type of frequent-flyer card members hold, and thereby their ability to access perks.
The overhaul of its frequent-flyer scheme has prompted an outcry on social media with some people suggesting it will encourage more travellers to fly on competitor airlines such as Virgin Australia.
Former Qantas chief economist Tony Webber said the change made sense economically, but was a public relations misstep.
"The timing is poor," said Mr Webber, who is now managing director of Webber Quantitative Consulting.
"These sorts of announcements scare people that are loyal to them [Qantas]," he said. "People are fed up with Qantas making changes that worry them."
The changes may also see some leisure travel customers that had stuck with Qantas' mainline service to earn frequent flyer points drift back to Jetstar to get cheaper fares, he said. This could affect the overall yield of fares.
Qantas' frequent flyer program is also linked to a range of partner businesses that use the lure earning frequent flyer points to help sell anything from credit cards to petrol and groceries, flowers, hotel rooms and even new cars.
While the changes Qantas announced relate to its own services, any drop in the overall popularity of its frequent flyers program could have a flow-on effect to many customer incentive programs around the country.
ANZ, which has some credit card incentive programs linked to Qantas Frequent Flyers, declined to comment.
With Qantas axing 5000 jobs and facing a full-year underlying loss of about $800 million, the changes are partly aimed at enticing members to be more loyal to Australia's largest airline rather than oneworld partner airlines such as British Airways, Cathay Pacific and Malaysia Airlines by using the carrot of more status credits on Qantas.
Under the changes, Qantas frequent flyer members will earn more points and status credits when they buy more expensive but flexible fares. However, they will earn fewer points when they buy cheaper tickets.
They will be able to earn more points on most fares in so-called ''flexible economy'', premium economy, business and first-class seats but fewer from cheaper fares in ''discount economy'' and, in some cases, economy.
Passengers flying some routes such as Tokyo-Sydney and Sydney-Cairns will also earn fewer status credits.
Qantas told its members there would be no changes to the number of points needed for a ''classic award'', or how members use their points for a chosen reward. The changes come into force on July 1.
The overhaul comes as a leaked internal document revealed that Qantas will cut 26 managers over coming months from across its business, including Jetstar, as part of 5000 job cuts.
The memo to staff named 26 senior managers who will be leaving, including Qantas International security head Steve Tregarthen, senior engineering manager Gavin Harris and Jetstar executive strategy manager Max Kownatzki.
Simon Chamberlain, who led the new travel booking site Hooroo, will also leave Jetstar.
WHAT ARE THE CHANGES?
Down: Discount economy and economy categories will drop to 800 from 1000 points
Up: Flexible economy, premium economy and flexible premium economy will rise to 1200 from 1000 points
Up: Business, flexible business and first class will rise to 1400 from 1250 points
The number of status credits members can earn based will now depend on where they fly, the fare paid and airline they fly on.
Discount economy ticket Melbourne-Singapore will drop from 3749 points to 2600 points
Business ticket Melbourne-Singapore will rise from 5624 points to 7800 points
Discount economy ticket Tokyo-Sydney will drop from 4863 points to 2600.
Business ticket Tokyo-Sydney will rise 7295 points to 7800
All changes apply from July 1