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The Australian Competition and Consumer Commission (ACCC) has urged consumers to “consider the value they receive” from frequent flyer programs as both Qantas and Velocity points see a decrease in buying power.
The consumer watchdog examined both Qantas Frequent Flyer (QFF) and Virgin Australia’s Velocity Frequent Flyer (VFF) in its latest Domestic Airline Competition report, noting that they “contribute significant revenue” to both airlines.
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The larger of the two, QFF, had 17.0 million members as at December 2024, compared to 12.9 million for VFF.
“While these programs can offer appealing benefits to consumers, they also come with certain drawbacks that consumers should consider before preferencing a particular airline in pursuit of points and status credits,” ACCC commissioner Anna Brakey said.
“We encourage consumers to look into how frequent flyer programs operate and weigh the potential benefits of frequent flyer points or status credits against the cost of flights when choosing fares.”
In the report, the ACCC said both QFF in August this year and VFF since June 2023 have “generally increased the number of points required to book certain flights”.
“For example, starting QFF Classic reward fares on Qantas flights increased by 15 per cent from 8,000 to 9,200 points (plus taxes, fees and carrier charges). Some QFF Classic reward premium economy, business and first class fares increased by 20 per cent,” the report read.
“At the same time, the Qantas Group decreased the number of points required for short-haul domestic Jetstar flights from 6,400 points to 5,700 points.
“For VFF, while the lead-in price for starting VFF reward fares decreased from 6,200 to 5,900 points, the price ceiling increased from 9,900 to 12,900 points.”
In response to the report, Qantas said the new changes are the first Classic Reward seat price increases in six years and only the second since 2004, and that points earned from domestic flights have been boosted by up to 25 per cent, meaning an extra 4 billion points will be awarded annually.
“We continue to see record levels of engagement from our members, demonstrating the significant value our program continues to deliver,” a spokesperson said.
Virgin Australia said its customers are increasingly using points as a way to offset travel costs, including through economy reward seats, points plus pay, and points redemptions on hotels and holiday extras.
“At Virgin Australia, we are always focused on providing exceptional value and choice to Australian travellers,” a spokesperson said.
“We offer frequent sale activity throughout the year, helping travellers access highly competitive fares. This includes our book early fares and discounted fares for regional residents, available on the Virgin Australia website.”
Both Qantas and Virgin notify passengers at least 30 days before implementing changes that will have a negative impact on benefits, the ACCC noted in its report.
“The Qantas Group provides at least three months’ notice for direct changes and at least 30 days’ notice where third-party benefits are affected,” the report read.
“Virgin Australia commits to a minimum 30-day notice before implementing major negative changes within its control.”
