Qantas is Seeing a Run on Redemptions Prior to Award Chart Devaluation

Just over a week ago Qantas announced what they touted as the biggest overhaul in its frequent flyer program history.

This amounted to reducing the cost of coach awards, and increasing the cost of premium cabin upgrades and awards effective September 18th. Fuel surcharges dropped on coach awards right away, and will fall on premium cabin awards when mileage costs go up in three months.

They announced new airline partners, a virtually unachievable lifetime platinum status, and a new program (with scant details) to recognize members who earn their points through partner activity rather than flying.

Virgin Australia took out a billboard outside of Sydney domestic terminal mocking the changes.

Qantas responded that “some things haven’t changed. Qantas still has the number one frequent flyer program.”

We still have the biggest and best ways to earn. And we are still the only Australian airline that flies to Europe, Africa, South America and half of Asia (or most of the globe). But the changes we have made have certainly been huge news for our members.

Qantas’ global reach isn’t meaningful in this context because Virgin Australia has a world of partner airlines that mirror that reach. However the airline offered up data in support of its claim that changes are good for members.

Year-over-year, the days since changes were announced have seen “total number of points redeemed is already up by approximately 45 per cent.”

  • 40% increase in international business class redemptions
  • 20% increase in international economy redemptions
  • 25% increase in members redeeming for the first time

The changes Qantas is making to international business class awards won’t take place until September but members are cashing in their points now in a big way before those changes go into effect. Mark Ross-Smith explains why Qantas felt emboldened to devalue its best awards.

Meanwhile members aren’t redeeming for the first time in increasing numbers because coach tickets have gotten marginally cheaper. These are members that have been saving their miles, and they’re abandoning that course. In all likelihood they see their miles are becoming worth less in the future, so better to use them now before that happens, rather than suddenly believing the program has unlocked the value of their points.

Meanwhile, certainly, lower coach award prices are translating into greater redemptions for coach travel. That’s exactly what you’d expect. However it’s the changes in redemption patterns that are happening when prices have not (yet) changed that’s most revealing.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Well now we know why they were offering those meager point bonuses for point transfers

  2. After the September devaluation, AA miles will be worth double the value of QFF points when redeeming J class on Qantas. That is you will need only half as many AA miles as QFF points for the exact same Qantas seat.

  3. So Qantas is screwing over engaged customers because they can. That’s a great recipe for a long term mutually beneficial relationship.

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