Qantas unveils major changes to frequent flyer program and a bumper $1.46bn profit
Qantas is overhauling its frequent flyer program to entice members to climb its vaunted membership tiers, in changes designed to prevent customers from switching to rival schemes.The reforms, described by the airline as the “biggest changes to status in program history”, have been unveiled during a hugely profitable period for Qantas, with revenue rising across its domestic, international and loyalty scheme businesses.On Thursday, Qantas announced planned changes to the loyalty scheme to allow members to roll over some of their status credits - the currency used to determine membership tiers - helping people reach or maintain high levels such as gold and platinum.This differs from the previous system of unused credits resetting to zero at the end of a holder’s membership year.However, the amount of credits needed to keep status levels is increasing, according to analysis from comparison site Finder.
Unlike regular frequent flyer points, status credits determine benefits such as lounge access, priority boarding and baggage allowances, regardless of the ticket type.Members will also be able to earn status credits through day-to-day spending, not just when flying.This change was trialled in 2025, but will soon become permanent.Qantas described the changes, which will begin later this year, as a way for “members to effectively strive toward that next tier”.There are also several changes designed to encourage members to work towards “lifetime status” that results from decades of loyalty to the airline.
While critics point out the airline’s loyalty program generally means customers pay for their own points via higher prices, it is a hugely popular scheme and helps determine consumer purchases.Qantas’ loyalty business enjoyed a 19% lift in revenue in its half year results published on Thursday, with the business unit generating money by selling frequent flyer points to credit card companies, banks and retailers.Customers then redeem these for flights and products.Overall, Australia’s airline delivered a record $1.46bn pre-tax profit for the six month period, as passengers shrugged off cost-of-living pressures to travel within and outside Australia.
Australia’s biggest airline credited robust customer demand, new routes and increased flight frequency to “Japan, Bali and across the Tasman”, and more fuel-efficient new aircraft for the strong result, up 5% from a year ago,The chief executive, Vanessa Hudson, is overseeing Qantas’s most expansive fleet-renewal program ever, balancing the huge expenditure required after a prolonged period of under investment,Qantas is replacing its ageing domestic fleet and purchasing long-range planes,Sign up: AU Breaking News emailHudson said on Thursday the new aircraft were “delivering better fuel efficiency, lower maintenance costs, and providing the flexibility to open new routes”,She said customer satisfaction levels were also rising due to the new planes.
The airline lifted revenue across its operations, with its budget carrier Jetstar once again the standout performer.Revenue at Jetstar increased by 8%, and its profit margins widened.Spending reports have consistently found that while many Australians are cutting back on discretionary items due to high living costs, travel remains a priority.Qantas expects strong traveller demand to continue, while noting it will monitor the “evolving economic environment in the US”.While the US market has been a challenge for Qantas, Hudson said she was not aware of any customers being turned away at US entry points due to their social media activity.
“I don’t think that that is at all an issue that we are seeing for our customers,” Hudson said.The airline is rewarding shareholders with an interim 19.8c dividend per share, representing a 20% increase, and share buyback.Buybacks are used to reduce the number of shares in a company, often resulting in a lift in share price.
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