Qantas is cutting the additional fees it charges frequent flyers using points, adding more than a million extra rewards seats a year and making it more expensive to upgrade in the biggest changes to its loyalty scheme in 32 years.
The additional seats on Qantas and new partner airlines will be the equivalent 2000 A380s and Qantas says they will be available at the times of highest demand and on popular routes.
New partner airlines where Qantas frequent flyers can “earn and burn” points include Air New Zealand, China Airlines, Bangkok Airways, Air France and KLM.
The $A25m annual investment will see carrier charges – the additional costs associated with booking flights —cut by up to 50 percent on international journeys, saving $A200 per journey on average.
People redeeming seats in economy class will need up to 10 percent fewer points but the number of points people require to redeem seats in premium cabins will rise by up to 15 percent.
It will also cost 9 percent more in terms of points to upgrade.
The increase in premium points is the first in 15 years and Qantas chief executive Alan Joyce said it reflected the improvement in the premium experience.
For an economy class passenger redeeming a return trip between Melbourne and Los Angeles, the changes will see the number of points needed fall from 90,000 to 83,800 and the charges drop by $A120 to $A393.
A premium economy return trip redemption will rise 18,600 points to 162,800 but passengers will save $A190 on charges, which fall to $A603.
Business class redemptions rise 24,800 points to 216,800 points but charges fall $240 to $703.
First class passengers see the biggest rise of 37,600 points, bringing the total to 325,000 points, but they see the same fall in charges as their business class counterparts.
“The Qantas Frequent Flyer program has always been about rewarding customers for their loyalty. These changes are about making it easier for members to access those rewards and help to keep them highly engaged, which in turn is good news for our business as a whole,’’ Qantas chief executive Alan Joyce said.
“We know the majority of our members want to use their points to take a dream trip overseas, so we are adding more reward seats including First, Business and Premium Economy, to places like London, Los Angeles, Tokyo and Singapore as well as slashing carrier charges.
“While the points required for business class seats on international and domestic flights will increase slightly, it is the first increase in 15 years and the product has improved a lot in that time.”
Other changes include a lifetime Platinum award for members accruing 75,000 status credits and the creation of a new tiered Points Club program, a sort of loyalty program within a loyalty program for high-buyers.
This is designed to better reward members who earn most of their points through on-the-ground transactions such as credit cards.
The initiative will include two tiers with entry based on a member passing an annual points-earned criteria.
Qantas says the club will unlock, for the first time, flight and travel benefits for non-flying members including lounge access and bonus status credits.
The entry-level Points Club tier will be accessed through earning 150,000 points on the ground while the exclusive ‘Points Club Plus’ tier will have a higher entry level.
“While frequent travellers have always been at the centre of what we do, the growth of our program and its hundreds of partners has provided opportunities for many members to now earn most of their points on the ground,’’ Qantas Loyalty chief executive Olivia Wirth said.
“Our members are all unique in how they choose to earn and use their Qantas Points. The combination of the new Points Club, the introduction of our most elite tier in Lifetime Platinum, and the increase in seats across our network means the revamped program should offer something for everyone.”
Not changing in the revamp are tier eligibility criteria and the status credits required, existing tier benefits and points earn rates on Qantas and partner airlines.