Frequent flyer programs fail travellers


Airline reward programs little more than pie in the sky

CHOICE says that most economy travellers would be better off looking for cheaper fares than using frequent flyer programs to earn flights or products.

In a review of rewards schemes, CHOICE found that an entry level Virgin Australia frequent flyer member would need to travel Sydney or Melbourne-LA return in economy 13 times to earn enough points to pay for the same trip with points. A Qantas bronze member would have to fly Sydney-LA return in economy seven times to earn enough points to pay for the same trip with points.

“Unless you’re clocking up serious air miles or paying for more expensive seats when you do fly, you’re going to wait a long time before you earn enough points for a toaster, an upgrade or a ticket. Not only that, there’s a good chance your points will expire while you’re waiting,” says CHOICE spokesperson, Ingrid Just.

For travellers who want to convert rewards points to products from frequent flyer online stores the challenge is equally as great.
A Virgin traveller would have to make the Sydney or Melbourne-LA return flight four times to earn enough points for a microwave that sells in stores for approximately $129. A Qantas entry level bronze member would need to fly Sydney-LA return six times to receive a 32” LCD TV with retail value of $439.¹

The people’s watchdog says that frequent flyer programs are more about creating a lucrative income stream for airlines than a genuine reward for customer loyalty.

Qantas’ frequent flyer program accounted for around 60% of the airline’s most recent net profit figure and is currently worth about 2 billion dollars.²

“If these programs were genuine reward schemes, the points would have longer expiry dates and the programs would be much simpler to understand,” says Ms Just.

Travellers told CHOICE they rarely find convenient flights where points are redeemable. They also report that the conditions on the programs are too restrictive and too many points are required for a flight.

“These points have become a virtual currency for airlines, you are better off finding the best flight deal and saving your money to spend elsewhere,” says Ms Just.

CHOICE has recommendations for anyone considering airline rewards schemes:

• Know your travel habits before committing to rewards schemes as a way to earn flights and upgrades or buy products. If you don’t fly a lot, you’re better off looking for cheaper airfares as opposed to flying just to earn points.
• Avoid airline stores online, as you’ll get much better value at a retailer.
• If you are in a frequent flyer program, keep track of your points and their expiry dates. Reward points with Qantas expire after 18 months while Virgin’s are valid for 36 months. If points are not used or added to in that period, they disappear unless travellers buy products from their Frequent Flyer stores.

¹Breville 34L microwave for 34,000 points with Virgin and LG 32” LCD TV for 86,500 points with Qantas entry level bronze membership. Products found in the airlines’ respective Frequent Flyer stores in August 2011.

²Figure quoted by Macquarie Transport analyst, Russell Shaw.

Read CHOICE’s report into frequent flyer programs. 

Media contact:
• Ingrid Just, CHOICE, Head of Media and Spokesperson: 0430 172 669

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