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Qantas has unveiled a $120 million expansion of its frequent flyer program that will make an extra 20 million seats available to book with points.
There will be four times as many ‘Classic Plus’ seats available compared to the existing 5 million ‘Classic Rewards’ seats, but they will often cost significantly more.
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The move, unveiled by newly appointed loyalty chief Andrew Glance, comes amid criticism that the current system is challenging to use and points have effectively devalued over the years.
“The new type of reward seat will usually require more points than the highly sought-after existing Classic seats and will be available to all destinations on the Qantas international and domestic network, across first, business, premium economy and economy cabins,” said Glance.
“We know how much our members love the existing reward seats and have been booking them in record numbers, so the new Classic Plus product we’re announcing today is over and above our commitment to 5 million Classic reward seats.”
The Flying Kangaroo said on Monday the update amounted to the “biggest ever expansions” of the program, which currently has more than 15 million members.
The new seats can be booked today for flights departing Australia for travel starting on 1 July. It will then be rolled out across the airline’s international and domestic network by the end of the year.
However, unlike traditional Classic Reward seats, the new Plus seats will not be available for booking on Jetstar flights, and prices will vary across peak and off-peak times.
A summary of the changes is at the bottom of this article.
Qantas Group CEO, Vanessa Hudson, said “The Qantas Frequent Flyer program is an integral part of Qantas and has always been about recognising our customers for their loyalty.
“We’ve spent a lot of time listening to members about how we can better reward them.”
Under the new system, a Classic Reward economy seat between Sydney and London would cost 55,200 points plus a $251 payment, one-way.
This compares to a Classic Plus seat costing 65,800 points plus the same payment during off-peak times and 65,900 during peak times.
Classic Plus seats will also be released 353 days ahead of the travel date to all frequent flyers at the same time.
“The program changes are expected to deliver a substantial improvement in member engagement and will help drive the long-term growth of Qantas Loyalty as it continues to target $800 million – $1 billion Underlying EBIT by FY30,” said Qantas in a statement.
“The Classic Plus product represents approximately $120 million investment in FY25, excluding benefits from the program.
“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 $230 million for FY25.
“Following the launch of the new product, Qantas Loyalty is now expected to deliver between $500 – $525 million Underlying EBIT in FY24 before returning to growth of ~10 per cent in Underlying EBIT in FY25.”
Australian Aviation reported in January that Glance, formerly executive manager of commercial partnerships, would replace Olivia Wirth as CEO of the loyalty division at the end of February.
Wirth had been considered a contender for CEO of Qantas Group to succeed Alan Joyce before the role ultimately went to then-CFO Hudson.
Hudson praised Glance’s “deep understanding of the loyalty business”, having been part of its leadership team for years.
The overhaul also follows Rex becoming the third entrant into what is often a cutthroat frequent flyer market.
Virgin and Qantas’ respective loyalty programs have been at war for years, with Virgin last year launching a similar “Switch-a-Roo” scheme to lure the Flying Kangaroo’s frequent flyer customers over to Velocity.
Classic Flight Rewards (existing)
- 5 million seats available each year
- Fixed points amount
- Usually the lowest points amount
- Available on Qantas, Jetstar and partner airline flights
- Upgradeable to premium economy and business
- Flexible reward seat conditions
Classic Plus Flight Rewards (new)
- 20 million seats available this year with similar availability ongoing
- Points amount vary like a normal airfare
- Usually a higher points amount than Classic (may be lower during sales)
- Available on Qantas marketed and operated flights
- Upgradeable to premium economy, business and soon to be upgradeable to first
- Flexible reward seat conditions
