The previously unheard-of Andrew Glance is about to take one of Australia’s hottest and most challenging executive seats – he has been named the new head of Qantas Loyalty.
How does he win back the favour of his loyalty customers, all of whom have been hit with an enormous decrease in the value of their points?
Andrew Glance will succeed Olivia Wirth as chief executive at Qantas Loyalty at the end of February.
Everyone is aware that airfares, particularly international airfares, have increased since COVID, but the increases aren’t a patch on the rise in the number of points needed to redeem flights.
By way of illustration: in 2019, a Qantas customer needed 139,000 points to fly one-way on business class to Europe using Classic Rewards, plus a couple of hundred dollars in fees and taxes. Back then Qantas would even throw in a chauffeur-driven limo at either end.
I checked the points pricing today for the same business flight in May 2024 – and to be fair to Qantas, I didn’t choose a flight in the peak of the northern hemisphere’s summer season. The best on offer was 1.2 million points; the highest was 2.5 million points.
This is in part because there are no Classic Rewards seats available. So Points Plus Pay is the only option.
Not since the massive peso devaluation crisis of South America in the 1990s have we seen such a currency collapse.
That’s a tenfold increase from 2019’s Classic Rewards price to today’s Points Plus Pay. In other words, the value of Qantas loyalty points has plummeted.
Not since the massive peso devaluation crisis of South America in the 1990s have we seen such a currency collapse.
For many customers who had been carefully squirrelling away points for years by spending at Qantas partner shops, telco and energy providers, even affiliate petrol stations – and of course, choosing to fly Qantas – flying at the pointy end using points is no longer an option.
As part of Qantas’ fundamental leaf-turning process, Glance, under the leadership of new chief executive Vanessa Hudson, has the challenge of convincing customers they have not been the subject of a points-pricing bait and switch.
Qantas’ first line of defence is to remind everyone that points can be redeemed for two kinds of tickets: the more generally used Points Plus Pay, and the better value Classic Rewards.
The latter require a fraction of the number of points, but sadly, those seats are as rare as hen’s teeth. (I searched through the May schedule and there were none available in any class.)
This is despite Hudson announcing last year that Qantas and Jetstar would release additional Classic Rewards seats.
The nice thing about Classic Rewards is that the value of the points currency doesn’t change, whereas Points Plus Pay fluctuates depending on the prevailing price of the fare.
There are now apparently 5 million Classic Rewards seats around – that’s counting Qantas domestic, Jetstar, and Qantas International and its partners.
But where are they hiding?
Maybe they could be found on a flight to a less popular destination – let’s say, a Qantaslink flight to Albury-Wodonga, or Jetstar to Rockhampton.
Some are clearly released for overseas flights, but even Qantas will admit that they get snapped up by avid buyers who sit on their screens all night waiting to pounce, so they disappear quickly. (The analog equivalent would be those shoppers who slept outside department stores in years gone by, waiting for the doors to open for Boxing Day sales.)
If Qantas wants to improve its standing with customers, the loyalty program and the devaluation of its Points Plus Pay product would be a good place to begin.
Over the past six months, many of Qantas’ traumatic customer service issues have receded – bags usually arrive at the same airport as customers, the long wait times to get a service representative have shortened, and cancellation rates have improved.
And sure, there are plenty of ways to earn points with many new business partners. But the cost of redeeming them for flights – in particular international flights – is, for most, prohibitive.
Make no mistake, selling a business-class fare to Europe for a couple of million points provides Qantas with a delicious profit, but it leaves a bitter taste for customers.
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