Qantas Frequent Flyer switching to a fixed-earning scheme

Want a more complex points-earning system? Check out the new Qantas Frequent Flyer scheme announced today. The company is shifting from a distance-based earning scheme – plus class-of-service bonus for higher fares – to a somewhat distance-based scheme with regions, zones and up to nine different fare categories to earn in. To say that the new scheme is excessively complicated might do a disservice to the word excessively. The company is positioning the changes as “fairer flying” and reminding customers it is “important for you to be rewarded for the fare you pay.” But they also stopped short of shifting to a wholly revenue-based earning scheme similar to Delta’s move announced a couple weeks ago. The new earning rates are in effect for travel on and from 1 July 2014.

In general, the numbers are about what one should expect from a revision to a loyalty program these days. Higher fares will be rewarded while economy class customers will see cuts to their earning rates. In some cases the cuts are quite notable. Alas, because of the number of different earnings tables and parameters which go in to calculating the rates it is not easy to do a one-to-one comparison and quickly see who wins and who loses.

They’ve made it so incredibly complicated that I’m not entirely sure it is worth trying to figure out the earnings any more rather than just buying what you want and hoping they credit it properly. The new scheme has nine different fare types defined and categorized into eight different “Frequent Flyer Categories.” Three of these categories are used to determine status-based bonus earning. There are different rules for regional, JetStar and Qantas-operated flights and twenty-two different flight regions in which a trip might operate.

Here’s what the new earnings table looks like:

Yes, it really is that ridiculous. Here’s the breakdown of which types of fares qualify in each category:

And here are some sample routes offered up by Qantas, showing comparisons in the rates.

Here’s another view of those same flights, showing percentage changes:

The average percentage change across the board (greater than 10% in 4/6 examples) might lead one to believe that the overall results of this new program are good for passengers. But it ignores that many more customers are buying fares in the first two columns than the other eight. Of course it is good to reward the better customers, both for the business and the customer. But an average cut of 37% for the lowest fares is going to hurt. Even the 7.5% cut at the regular economy level will hurt. Premium Economy passengers would seem to make out quite well with the changes, in addition to the better in-flight experience.

Maybe I’m being too harsh in my judgment, calling it “bad” in a situation where many customers will actually benefit from the new rates. Maybe this really is more fair for the high fares, and the lower fares don’t’ get screwed too badly. But I do know that excessive complexity in the programs has two main effects:

1. It creates more potential for loopholes and quirks which can be exploited; and,
2. It drives away customers who simply do not have the time nor energy to learn and understand the scheme.

I cannot help but wonder how both of these – especially number two – are going to work against Qantas with these changes.

Thanks to reader David for sharing the “good” news.

Related Posts:

• Winners and losers with Delta’s new revenue-based SkyMiles earnings
• Why the Delta SkyMiles changes don’t really matter