Frequent flyer points benefit airlines more than you

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So you thought that frequent flyer programs were designed to benefit the customer; loyalty schemes that rewarded those faithful to an airline with better deals and cheaper flights in the future? Think again! Scheme is definitely the right word when it comes to these incentive-based programs. I can think of a few others, too: rip-off, scam … you get my drift.

It turns out that customer-loyalty programs such as Qantas’ frequent flyer one are big, and I mean BIG, business. Qantas rakes in about $400 million a year from its loyalty program. The Australian carrier on-sells points to its large corporate partners (e.g. NAB, ANZ), who in turn essentially sell the points back to customers through credit card spending/shopping programs.

In short, most of us are actually paying for any frequent flyer points that we ‘earn’ and, as many disgruntled travellers have also discovered, airlines don’t want you to use those points, prompting various conditions about expiry dates and account activity.

Talk about a farce!

Are you part of any frequent flyer programs? If so, what’s your experience of trying to use points to book a flight?

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Written by Lucy


Total Comments: 11
  1. 0

    It’s all about reading the fine print. Frequent flyer implies just that, and no activity in 18 months is not “frequent “. Sorry I am with the airline on this. I am not a frequent flyer member and choose to redeem my accrued flyby points in cash when shopping, which I do frequently.

  2. 0

    Hi Franky, Flyby points are not Frequent Flier points (i.e. QANTAS and VIRGIN). They are a Coles copy and, yes, the best use for them is to convert to Coles products.

  3. 0

    It’s not as black and white as you suggest Lucy. If you are spending ANYWAY why not get a benefit for this. Of course if you purchase things you have no need of to gain points then you get done over, but that is individual stupidity playing out. So who is to blame?

  4. 0

    I’d like to know how to get out of Frequent Flyers. I ‘unsubscribed’ which has cut down the number of email ‘deals’ I receive, but there doesn’t seem to be a way to cancel membership.

  5. 0

    What a crock! I do wish you authors would RESEARCH what rubbish you write. Scam, Rip Off??? Where?
    I have been a gold member of velocity for approx 4 years now, it has cost me nothing!
    I have Fly Buys, they give me these when I shop they are free, I can use them to pay for shopping or, I can convert to velocity when there is a15°or better deal.
    I get velocity points from dozens of places where I shop they are also free, the price of the goods don’t go up for being a member.
    I have two credit cards that earn me points with fly buys and the other with velocity. I NEVER pay interest on these cards, I pay them off before the interest free period ends.
    I just booked my flight tp perth in December and upgraded to ‘The Business’ via the members desk with no problem.
    On the other hand QANTAS have a bad reputation for upgrades and reward seats. Check the Freddie’s, that’ll tell you more. I also suggest you subscribe to the ABT and Aus frequent Flyer Gazette etc.
    Please research before putting the fear of God up travelers, you are merely doing a disservice to them.

  6. 0

    I don’t know much about Qantas Frequent Flyer points, but using a credit card correctly which gives me Velocity points is great. I have had no problems with redemption. Just be aware that it requires a lot of spending to receive points, so as long as the spending is not purely to receive points – make it work for you.

  7. 0

    I agree Thoughtful, I am Platinum for both QANTAS and Virgin, collect points from wherever I can but only for things I would buy anyway.

    Status points keep me at the level to get the clubs for free and the points enable me to fly family around Australia and overseas.

    • 0

      Some really good comments here, I have to admit to being a bit of a novice regarding credit cards and how they work regarding frequent flyer points, and how to get credit cards that give decent frequent flyer points, I thought you had to have a high income to get a credit card that gave high points value, I am on a part pension so how would I be able to attract a high points credit card that doesn’t have exorbitant fees?

  8. 0

    This article has come out on a day when 4350 Qantas points have landed in my account in lieu of 50 Woolworths dollars. I also get points from a credit card. Yes I know there are charges but I work it out and it’s good value. For example, it costs 228000 points for return business class to London so taking points instead of dollars means my return business class flight would cost about $2600 + taxes or about a third of the cost of purchasing. The limited seats released by the airlines for points booking can be a problem so you have to book early and think outside the square. We had trouble finding flights out of Australia so we booked BA out of Kuala Lumpur to Heathrow and Air Asia premium flatbed flat bed to connect in KL for $499. Coming home we flew Cathay business out of Paris all the way to Brisbane using points. These schemes are good value. We would never be able to afford business class otherwise.

  9. 0

    Foolish people who cannot control their spending will always blame corporations
    Foolish people and leaners . Mick k owe all about the latter



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