What recent changes to Qantas Frequent Flyer programs will really cost you

With recent changes to both Qantas Frequent Flyer and Virgin Velocity rewards programs, travellers now have a little homework to do before deciding how to spend their points.

Announced earlier this year, Qantas has overhauled its Frequent Flyer program with a variety of changes that will add more than one million reward seats to Qantas and partner airline flights, reduced carrier charges on international bookings, increased the points cost of premium cabin reward seats and introduced a new Lifetime Platinum frequent flyer class.

If you're an infrequent flyer who redeems points for economy seats, you now have a greater opportunity to fly for fewer Qantas points, both domestically and internationally, on Qantas and partner airlines. 

However, if you travel at the pointy end, the reduction in carrier charges comes alongside an increase in the Qantas points required for domestic and international premium cabin seats, of up to 15 per cent.

Doing the math

For example, a return business class fare to Los Angeles previously cost 192,000 Qantas points, plus taxes, fees and a carrier charge. The same flight now will cost 216,800 Qantas points – an increase of roughly 11 per cent. The previous carrier charge of $943 has now become $703 – a reduction of 25 per cent, or $240.

That said, with the increased flexibility Qantas has built into these changes by offering more rewards seats available across more routes, you probably won't care about the increase once you're sipping champagne in your flat bed at 30,000 feet, watching reruns of The Golden Girls.

Rival response

As if in response, Virgin Australia also recently announced changes to its Velocity rewards program, which, "are necessary to cover increased airline operating costs", said Karl Schuster, CEO, Velocity Frequent Flyer.

Taking effect from 8 January 2020, the company will increase carrier charges on domestic, trans-Tasman, international short-haul and Hong Kong flights for economy, premium economy and business class rewards seats, which can be paid in points or a combination of points and cash.

On average, the increases range anywhere from around 40 per cent to 100 per cent, per sector, depending on the route. There are no changes for flights to Los Angeles.

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Where to find the deals

With these changes to two of Australia's biggest airlines, the question is now, what's the best way to spend your points? The two options on the table are to purchase an upgradeable fare and then use points to upgrade to a premium cabin class; or go straight to Go and purchase the premium cabin seat, in full, using points, or points and cash.

"For long-haul flights, it's a lot clearer nowadays; go for the outright redemption," said Daniel Sciberras, Managing Editor at Point Hacks. "If you look at the number of points you need for an outright redemption for business class to LA, for example, as opposed to buying a standard economy ticket that is upgradeable; the points differential is micro."

"When it comes to domestic flights, it's much of a muchness - I would still probably do an outright redemption, but there are circumstances where your work may pay for an economy flight then you go for an upgrade on that. It's not as clear cut for the shorter flights."

Small differences matter

Alongside that 'micro' points difference, there may also be a caveat to your redemption, depending on your chosen airline – so, do your research.

"It's better going for an outright redemption with Qantas, especially if you're a lower value member," said Sciberras.

"With Velocity, you've got a requirement, that, if you want to upgrade your long-haul flights from, say, Hong Kong to LA with Virgin, you can only do that if you're a Velocity Gold or Platinum member. So, for a big chunk of the Velocity membership, they won't have that option to upgrade long-haul flights."

In light of these recent changes posing various wins and losses across both rewards programs, if you're looking to fly in a premium cabin it now pays to research your route thoroughly to ensure you purchase the appropriate fare; whether upgraded or outright with points.