Big Qantas loyalty scheme shake-up - what it means for travellers

Qantas has announced changes to its loyalty scheme in what it says is one of the biggest revamps of the programme in the past 35 years.

The revamp means the number of reward seats will climb from five million to 20 million more reward seats with the launch of Classic Plus Flight Rewards, a new way for members to use points to book flights.

The airline said today that while usually requiring more points than the existing Classic reward seats, Classic Plus will represent “some of the best value” across the frequent flyer programme with much wider availability.

Classic Plus reward seats are also eligible for upgrades.

The changes will cost the airline A$120 million ($131m) in the 2025 financial year and start with international flights originating in Australia.

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The existing scheme came under fire last year with disgruntled customers ripping into it during an Australian senate inquiry into bilateral air service agreements with some reportedly describing it as “a big scam” and a “rip-off”.

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Qantas Group chief executive Vanessa Hudson said today the airline was aware many customers had large points balances and the new programme reset access to redemption.

“We’ve listened, we’ve acted and will stimulate the next phase of growth,” she said.

Qantas said points required to book Classic Plus reward seats will vary like normal airfares, so they’ll be lower during off-peak periods or when booking early, and higher during peak periods. During sales and promotions, Classic Plus reward seats may drop below a Classic reward seat on the same route.

The new scheme is on Qantas flights only and excludes Jetstar and other codeshare and partners’ flights.

Air New Zealand has been working on revamping its loyalty scheme for several years, again surveying its top tier members earlier this year.

“The team are currently working through a re-platforming of our loyalty programme which will see us being able to reassess the benefits we deliver to our members across all tiers in the coming years,” said a spokeswoman.

Air New Zealand has been working on revamping its own loyalty scheme.

Air New Zealand said it would share more with its customers “in due course”.

Qantas has close to 16 million loyalty members.

Classic Plus reward seats can be booked from today on Qantas international flights departing Australia.

By the end of 2024, when Classic Plus will be fully launched across the international and domestic network, members will have had access to 20 million new reward seats for travel across the rolling 12-month booking window.

Hudson said the growth and success of Qantas Loyalty was driven by engaged members who earn and redeem points across the frequent flyer programme.

“That’s why we’re investing in making more seats available to book with points.”

The programme changes are expected to deliver a substantial improvement in member engagement and help drive the long-term growth of Qantas Loyalty as it targets A$800m to A$1 billion underlying earnings by 2030.

This investment includes the value of displaced seat revenue in the airlines as well as the non-cash impact to fair value assumptions applied to future sale of points in the Loyalty Segment. The combined financial investment will be managed within the existing planned customer investment of A$230 million for FY25.

Following the launch of the new product, Qantas Loyalty is now expected to deliver between A$500 – A$525 million underlying earnings before interest and taxes (ebit) in FY24 before returning to growth of about 10 per cent in underlying ebit in FY25.

Qantas CEO Vanessa Hudson says loyalty changes are the biggest in the last 35 years. Photo / Getty Images

Jen Staples, Flight Centre Travel Group air and product manager, said the new Qantas programme was exciting for passengers.

The existing Classic programme has limited availability, so if you want to travel during peak season, you must book well in advance, she said. The new addition of Classic Plus essentially allows programme members to redeem rewards at a higher rate, which will provide them with more booking options and flexibility.

Qantas’ loyalty programme is one of the popular airline loyalty programs for New Zealanders, although Air New Zealand’s is still the most favored.

“We encourage all of our customers, both corporate and leisure, to earn and redeem loyalty points where possible. This is particularly important at a time when we’re facing high living costs, as loyalty points can help extend travel budgets to their full potential,” said Staples.

“With so many loyalty schemes available - for airlines, accommodation and other travel add-ons, the best thing to do is speak with your local travel agent or corporate travel manager to work out how to utilise them to get the most bang for your buck.”

Qantas Q&A

When will Classic Plus reward seats be available to be booked?

From today, Classic Plus reward seats can be booked across one-way or return international Qantas-operated flights departing from Australia for travel from July 1. By the end of the calendar year, they’ll be available to book and travel on across the full Qantas international and domestic network.

How many Classic Plus reward seats will be available across each flight?

The number of Classic Plus reward seats available on each flight are linked to specific commercial fare classes, which cover most seats on the Qantas domestic and international network. Once fully rolled out, Classic Plus reward seats will be able to be booked on any flight with these fare classes available, although they can sell out.

Will Classic Plus reward seats be available on Jetstar or partner airlines?

Classic Plus will only be available across Qantas-operated flights, but frequent flyers can still access Classic reward seats across Jetstar and the network of 45 partner airlines.

Are the taxes, fees and carrier charges (TFCCs) the same as Classic reward seats?

For Economy and Premium Economy seats, the TFCCs for Classic Plus reward seats will be the same as Classic reward seats. On a transtasman return flight they are A$256. For Business and First seats, the TFCCs for Classic Plus reward seats will be higher than Classic reward seats.

Are Classic Plus reward seats upgradable?

Yes, Classic Plus reward seats can be upgraded and, from May, frequent flyers will be able to apply to upgrade their booked Classic Plus Business seats to First, which isn’t possible on the existing Classic reward seats.

What’s the value per point for a Classic Plus Flight Reward?

It varies between economy and premium cabins with more Qantas saying there’ll be more value on Business and First seats. Following the existing Classic reward seats, Classic Plus reward seats will be one of the best value ways to use points across the programme.

Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.